Pakistan Considers US Crude Imports to Leverage Tariff Talks with Washington

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Strategy Aims to Offset Trump-Era Tariffs and Diversify Energy Sources

Pakistan is evaluating a strategic shift to import U.S. crude oil as part of its broader plan to negotiate reduced tariffs with Washington following the current 90-day suspension period. The move comes amid a push to maintain strong bilateral trade ties with the U.S. under former President Donald Trump's paused 29% reciprocal tariffs on Pakistan.

Refinery sources and government officials confirmed that Cnergyico, Pakistan's top refiner, is keen to incorporate light sweet U.S. crude grades into its operations. The company cites both feedstock compatibility and freight advantages with Aframax and Suzemax vessels as motivating factors.

U.S. Crude Could Boost Fuel Output But Add Economic Strain

Cnergyico Vice Chairman Usama Qureshi emphasized that light-end U.S. grades would improve production of gasoline and middle distillates, products that remain in short supply across Pakistan. In the fiscal year through March 2025, Pakistan imported 3.973 million metric tons of gasoline and 1.492 million metric tons of diesel — up 12.4% and 21.3% year-on-year, respectively, per OCAC data.

While importing U.S. crude offers potential trade leverage and enhanced energy security, industry analysts warn that the economic trade-offs are considerable. Higher freight, insurance, and handling costs compared to Middle Eastern suppliers such as Saudi Arabia or the UAE could burden Pakistan’s economy and elevate domestic inflation.

Ali Nawaz of Chase Securities noted that while the diversification move strengthens negotiation leverage, it also places pressure on foreign exchange reserves. Analysts from AKD Securities and Topline Securities agree that pricing differentials — like the April 28 WTI Midland premium of $3.45/b over Dubai crude — must narrow to make such imports viable.

Diplomatic and Trade Moves Underway

Finance Minister Muhammad Aurangzeb recently visited the U.S. to highlight Pakistan’s willingness to increase imports from the U.S., including crude oil. He emphasized that Pakistan is already buying U.S. cotton and soybeans and seeks additional investment from American companies.

Pakistan's trade balance with the U.S. is currently in surplus, with exports up 12% to $4.5 billion and imports from the U.S. rising 25% to $1.729 billion through March. Islamabad plans to send a delegation to Washington in the coming weeks to explore potential tariff relief and broader trade expansion.