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Oil Import Resumption on Pakistan Agenda

Oil Import Resumption on Pakistan AgendaOil Import Resumption on Pakistan Agenda

Pakistan is considering the resumption of crude oil import from Iran via land route following the removal of international sanctions.

According to an official familiar with the matter, discussions are underway in government circles that Pakistan, which had stopped oil import through land route about six years ago, should remove restrictions, as the UN and the US sanctions on Tehran have been withdrawn.

“This plan will lead to resumption of Iran oil imports halted since 2010,” Pakistan's Express Tribune quoted the source as saying.

This way oil smuggling from Iran, which has been continuing without much interruption through Balochistan, will come to an end and legal avenues will open up.

Instead of refined oil, Iran is capable of exporting crude oil in big volumes. Two Pakistani refineries–Pakistan Refinery Limited and Bosicor–had been importing Iranian crude until 2010 but after the sanctions, banks refused to open letters of credit for oil purchases.

According to a study by Pakistan's government, the main stumbling block in the way of trade with Iran is the payment for goods through banks.

Now that sanctions against Iran are lifted, Pakistan is hoping to open banking channels in June this year, which will lead to the opening of land route for oil supply from Iran.

Pakistan is currently importing crude oil from the UAE and Saudi Arabia to meet domestic demand. The country consumes around 22 million tons of oil per year. Local refineries produce 13 million tons and the rest is imported.

 

Financialtribune.com