In the bustling corridors of Islamabad, where geopolitics often overshadows economics, a quiet yet significant conversation is gaining momentum. Pakistan, long reliant on Middle Eastern oil, is now contemplating a pivot — one that could reshape not only its energy landscape but its global trade dynamics. For the first time, the country is considering importing crude oil from the United States.
This move isn’t just about barrels and pipelines; it’s about diplomacy, strategy, and a nation attempting to chart a more balanced path through choppy economic waters.
Why the Sudden Interest in US Oil?
At the heart of the matter is a growing trade imbalance between Pakistan and the United States. In 2024, Pakistan registered a trade surplus of approximately $3 billion with the US — a number that should typically be a badge of honor. However, in the era of transactional diplomacy and tariff wars, it has become a liability.
Due to this surplus, Pakistan now faces a daunting 29% tariff on its exports to the US — a move tied to President Donald Trump’s sweeping policy to protect American industries and reduce trade deficits. These tariffs have started to pinch. Pakistani exports, especially in textiles and manufacturing, are losing competitiveness in the US market.
To counter this, Pakistani officials are actively reviewing the possibility of importing oil from the US — not just as a business deal, but as a diplomatic gesture to narrow the trade gap and gain favorable tariff adjustments.
The Politics Behind the Petroleum
A senior government source, who spoke on condition of anonymity, confirmed that discussions are underway. “It is one of the products being reviewed ahead of a delegation leaving for the US to talk about tariffs,” he said. “It is under active consideration. We are exploring opportunities and the structure to do it, but the PM has to approve it.”
This is not just about importing oil; it’s about leveraging imports as a bargaining chip in larger trade negotiations. The goal? To realign Pakistan’s trade strategy and win concessions from the US administration.
The logic is simple: If Pakistan starts buying oil from the US — equivalent to about $1 billion worth — it could soften its trade surplus and, in turn, prompt a reduction in tariff rates. It’s a subtle yet strategic attempt to play by the rules of global commerce in a world increasingly defined by bilateral trade deals and hard-nosed negotiations.
A Glimpse at the Numbers
To put things in perspective, Pakistan imported around 137,000 barrels of crude oil per day in 2024, mostly from the Middle East. The total oil import bill stood at a staggering $5.1 billion. Saudi Arabia and the UAE have traditionally been Pakistan’s energy lifelines, with the Saudi Fund for Development (SFD) alone providing around $6.7 billion in financing since 2019.
In fact, just this February, Saudi Arabia extended a $1.2 billion facility to Islamabad to finance oil imports for another year.
So, shifting a portion of this import volume toward the US — a non-traditional source — signals not only economic recalibration but also a potential geopolitical rebalancing.
Challenges on the Horizon
While the idea is gaining traction, the road ahead is riddled with logistical and economic challenges.
For one, Pakistan’s refineries are primarily configured to process light and medium crude from the Middle East. US oil, particularly from shale, may differ in composition and require adjustments or blending — a process that could incur additional costs.
Moreover, transporting oil from the US would be more expensive due to the longer distance. Shipping costs, insurance premiums, and the time taken for delivery could all impact feasibility.
Yet, these hurdles haven’t deterred interest. A refinery executive, who also requested anonymity, told Reuters that the idea is being seriously considered. “We are looking at equivalent volumes to our current imports — about $1 billion worth,” the executive said.
Clearly, the willingness to absorb short-term inefficiencies reflects a broader strategic objective.
The Global Context
Pakistan isn’t alone in this game. Around the world, countries are rethinking their trade policies in response to US tariffs.
India’s GAIL recently issued a tender to buy a 26% stake in a US liquefied natural gas (LNG) project. Japan, South Korea, and Taiwan are also reportedly eyeing American LNG ventures. The message is clear: buying US energy can be a tool to manage trade relationships.
This trend speaks to a new era of global trade — one where energy transactions double as diplomatic signals. By importing oil or gas from the US, countries aren’t just buying fuel; they’re buying goodwill.
Gwadar’s Strategic Role
Amid these developments, Pakistan’s Gwadar Port could play a crucial role. Situated on the Arabian Sea, Gwadar is being positioned as a major energy hub in the region. There have already been calls for building an oil refueling depot for ships — a move that would enhance Pakistan’s maritime and trade capabilities.
If the US oil import plan materializes, Gwadar could emerge as a transit point or even a processing hub in the long run, integrating Pakistan more deeply into global energy corridors.
What It Means for the Average Pakistani
For the common citizen, the idea of importing US oil may seem distant — just another diplomatic maneuver in the headlines. But its ripple effects could be significant.
If the strategy succeeds and leads to tariff relief, it could mean better export opportunities for Pakistan’s textile sector, which employs millions. Lower tariffs would help Pakistani products stay competitive in the lucrative US market, ultimately protecting jobs and increasing foreign exchange inflows.
Furthermore, diversifying oil sources could add a layer of energy security. In times of regional tension or supply disruptions in the Middle East, having alternate partners like the US could prove invaluable.
And if the government can negotiate favorable credit terms — as it has with Saudi Arabia — it could cushion the impact on the country’s dwindling foreign reserves.
A Calculated Risk Worth Taking?
The decision to buy US oil isn’t without risk. It could strain relations with traditional allies in the Gulf, who have been steadfast partners in Pakistan’s economic journey. There’s also the possibility that the expected tariff relief may not materialize, making the move economically unviable.
But in a world where trade, energy, and diplomacy are increasingly intertwined, nations must sometimes take calculated risks.
Pakistan’s leadership appears to be weighing these options carefully. The delegation heading to Washington in the coming weeks will have a lot on its plate — from tariffs to energy cooperation, from trade deficits to diplomatic balances.
At stake is more than just oil. It’s about Pakistan’s place in a rapidly evolving global order.
The Road Ahead
As of now, the proposal is still in its early stages. No official decision has been made, and the Petroleum Ministry has remained tight-lipped. But the momentum is building, and conversations are taking place at the highest levels.
In the coming months, the world will be watching to see whether Pakistan takes this bold step — not just to diversify its energy imports but to assert itself as a nimble player in the high-stakes game of international trade.
