Pakistan’s largest oil refiner, Cnergyico (CNER.PSX), has signed a landmark agreement with American energy firm Vitol to explore and develop domestic oil reserves and import crude.
The agreement, described by officials as a breakthrough in bilateral trade cooperation, comes as part of a broader trade deal between Islamabad and Washington aimed at reducing tariffs on Pakistani exports and enhancing cooperation in energy, minerals, IT, and cryptocurrency sectors.
Cnergyico Vice Chairman Usama Qureshi confirmed on Friday that the company would import 1 million barrels of West Texas Intermediate (WTI) light crude from Vitol in October. This will be Pakistan’s first-ever purchase of US-origin oil and is expected to arrive in Karachi during the latter half of the month.
“This is a test spot cargo under our umbrella term agreement with Vitol,” said Qureshi while speaking to Reuters. “If it is commercially viable and available, we could import at least one cargo per month.”
He noted that the move followed months of negotiations that began in April after then US President Donald Trump warned of imposing a 29% tariff on Pakistani imports. Following diplomatic engagements, the White House revised the tariff to 19%, and Islamabad credited Washington’s intervention in easing regional tensions with India as well.
Qureshi said the federal finance and petroleum ministries encouraged Pakistani refiners to diversify their sourcing and consider US crude imports following the tariff threat. The country has so far relied almost entirely on Middle Eastern suppliers.
“This deal allows us to reduce dependency on Gulf grades while maintaining comparable refining margins,” Qureshi said. “No refinery modifications or blending will be required.”
Cnergyico, which operates a 156,000 barrels-per-day (bpd) refinery and the country’s only single-point mooring terminal near Karachi, is also planning major infrastructure expansion. The company aims to build a second offshore terminal and upgrade its existing refinery over the next five to six years to accommodate larger or more frequent shipments.
The refinery, currently running at a 30%–35% rate due to subdued local demand, is betting on a recovery in consumption—particularly in the October–November period when demand typically rises.
The company’s agreement with Vitol also includes collaboration for exploration and development of Pakistan’s oil reserves. The plan is part of a longer-term strategy to boost domestic production, reduce reliance on imports, and attract foreign investment into the energy sector.
Meanwhile, officials from both countries have termed the trade agreement a “new era” of economic cooperation. Under the accord, Pakistani goods will gain improved access to US markets, with reduced tariffs aimed at promoting exports.
Pakistan’s oil imports were valued at $11.3 billion in the fiscal year ending June 30, 2025—comprising nearly 20% of the country’s total import bill.
Speaking earlier this week, US President Trump said Washington would support Pakistan in developing its “massive oil reserves”, although he offered no additional details. Islamabad has also nominated Trump for the Nobel Peace Prize, citing his role in de-escalating tensions in the region.
