Key facts
- Pakistan's refiners are seeking alternative crude oil sources due to Middle East supply risks.
- Potential alternative suppliers include the U.S., Nigeria, Singapore, and Central Asia.
- Threats to the Strait of Hormuz and Bab el-Mandeb Strait are impacting oil and LNG imports.
- Pakistan's oil minister has urged refiners to secure uninterrupted supplies from new sources.
- LNG procurement has also been disrupted, leading to higher spot market prices.
Pakistan's oil refiners are actively seeking alternative crude oil sources outside the Middle East amid escalating geopolitical risks that threaten key shipping lanes. Refiners are inquiring about supplies from the U.S., Nigeria, Singapore, and Central Asia following a briefing from the federal minister for petroleum and natural resources on the growing threats to supply.
The renewed closure of the Strait of Hormuz and the Houthi threats to block the Bab el-Mandeb Strait, which could halt Saudi crude exports via the Red Sea, have prompted Pakistan to diversify its import portfolio. Companies like Pakistan Refinery Limited (PRL), Pakistan Arab Refinery Company (Parco), and National Refinery Limited (NRL) currently import crude from the UAE via Fujairah, which is outside the Strait of Hormuz.
However, imports from Saudi Arabia's Red Sea port of Yanbu are now uncertain. The minister directed refinery executives to immediately identify alternative sources to ensure uninterrupted supplies. Traders in Singapore are also being contacted regarding crude cargoes already at sea, away from Middle Eastern waters.
The crisis has also impacted Pakistan's liquefied natural gas (LNG) procurement, forcing the country to pay premium prices on the spot market due to disruptions from its term supplier Qatar.