Pakistan Plans Joint Oil Storage Scheme With Saudi Arabia, Kuwait and Qatar

Petroleum Minister Ali Pervaiz Malik said Sunday that Pakistan is working on a commercial oil storage arrangement with Saudi Arabia, Kuwait and Qatar to strengthen the country’s energy security and protect against future supply disruptions.

 

Speaking at a press conference in Lahore, Malik said the three Gulf countries would store crude oil and petroleum products at bonded facilities in Pakistan at their own expense. The supplies could then be exported to international markets from Pakistan.

 

Under the proposed arrangement, Pakistan would have the option to purchase the stored oil during a crisis by paying the respective countries, allowing it to meet domestic energy requirements without having to maintain the entire stockpile itself.

 

Malik said the commercial bonded storage proposal, prepared with assistance from Saudi Aramco and other major companies, has been submitted to the Economic Coordination Committee (ECC) on the instructions of Prime Minister Shehbaz Sharif. A decision is expected next week.

 

The initiative comes as disruptions in oil supplies through the Strait of Hormuz have highlighted Pakistan’s vulnerability to external energy shocks. The country currently does not have strategic petroleum reserves, while around 90% of its energy requirements are met through imports.

 

Malik estimated that establishing crude oil reserves sufficient for one month would require around $500 million, while an underground storage facility could cost an additional $300-400 million. He said the government would assess the feasibility of making such an investment in the coming months.

 

Pakistan currently produces around 70,000 barrels of oil per day against domestic demand of approximately 500,000 barrels per day, underscoring the need to accelerate local oil and gas exploration, the minister said.

 

He added that the government has tasked an international company with preparing a comprehensive roadmap for Pakistan’s energy sector, which will be presented to the leadership in the coming months.

 

Meanwhile, Türkiye’s Turkish Petroleum is expected to begin offshore drilling operations in Pakistan’s territorial waters, which Malik said could attract significant foreign investment into the energy sector.

 

The minister also announced that LPG tenders would open Monday and said arrangements had been made to facilitate the issuance of new gas connections.

 

On fuel prices, Malik said the government had managed to maintain uninterrupted petroleum supplies despite disruptions caused by the US-Iran conflict. He said authorities were also working to shield consumers from the full impact of higher international oil prices.

 

The government has been adjusting fuel prices frequently since mid-July in response to volatility in global markets. Previously, prices were revised weekly following the outbreak of the conflict.

 

Malik also said the government was addressing long-standing financial problems in the petroleum sector following the federal cabinet’s approval of a new refinery policy and measures to increase the country’s strategic petroleum reserves.