Easing of US sanctions on Iran opens door for cheaper oil, gas imports to Pakistan

ISLAMABAD: After the temporary relaxation of US sanctions on Iran, the prospects for the cheap purchase of crude oil and gas have become clear for Pakistan.

According to experts, the real benefit is not just a big reduction in price, but can be achieved through the right strategy and contractual terms.

A few days ago, the Federal Minister for Petroleum had said that they are in contact with Iran to procure energy products, including crude oil, and efforts are being made to purchase such oil that is beneficial for the country’s economy.

According to energy experts, if Pakistan enters into a direct government-level agreement with Iran and eliminates the middleman, the price per barrel can come down significantly.

Due to geographical proximity, freight and shipping costs also reduce, which can provide immediate relief in the overall price.

According to reports, Iran is currently giving some buyers a discount of 3 to 10 dollars per barrel to regain its place in the global market, which countries like Pakistan can benefit from.

According to experts, since Iranian crude oil is heavy, Pakistani refineries will have to mix it with light crude oil, which can improve production and reduce costs.

On the other hand, analysts say that Iran is now returning to the global market, so very cheap oil is not possible permanently, and the price will mostly remain close to the global rate. However, due to limited concessions and low transport costs, Pakistan can definitely get partial relief.

According to energy experts, if a favorable trade agreement is reached between Pakistan and Iran and global sanctions on Iran are completely lifted, then the prices of petroleum products in Pakistan are possible to reduce significantly, and according to some estimates, the prices of petrol and diesel can fall below Rs 150 per liter.