Pakistan has formally approached Saudi Arabia to continue its deferred oil financing arrangement, as the government works to secure external funding and protect foreign exchange reserves. The move comes weeks before the current agreement expires, placing urgency on economic managers.
Under the existing plan, Riyadh supplies roughly $100 million worth of oil each month on deferred payment terms. This arrangement allows Islamabad to meet part of its energy needs without immediate cash outflows, easing short-term fiscal pressure.
Officials confirmed that the facility, valued at about $1.2 billion annually, is scheduled to run until early 2026. Pakistan has now requested an extension that could potentially keep the support in place until the completion of its ongoing International Monetary Fund programme.
The Pakistan requests Saudi oil facility initiative reflects the country’s broader strategy to maintain financial stability while pursuing structural reforms. Saudi Arabia has long been a major economic partner, providing budgetary support and rolling over deposits to strengthen Pakistan’s reserves.
Meanwhile, a Pakistani economic delegation is visiting the Kingdom to discuss investment opportunities under the Special Investment Facilitation Council framework. The talks aim to deepen bilateral cooperation and attract Saudi capital into priority sectors.
Pakistan requests Saudi oil facility. In parallel, Islamabad is racing to secure the rollover of $2 billion in deposits held by the United Arab Emirates at the State Bank of Pakistan. Only about 12 days remain before the extended deadline expires after earlier maturities in January 2026.
Authorities have requested a further one-year extension until February 2027. If the rollover does not materialize, Pakistan would need to repay the amount within the month, adding pressure to already constrained reserves.
The deferred oil facility is widely viewed as critical to Pakistan’s external financing framework. When first signed, officials said it would help ensure a stable supply of petroleum products while reducing immediate fiscal burdens.
Economic analysts note that such support from friendly countries often complements multilateral assistance. Pakistan has relied on foreign inflows to stabilize its currency and manage debt obligations amid persistent financial challenges.
As discussions continue, the outcome of the Saudi request will likely shape Pakistan’s near-term liquidity outlook. For now, policymakers remain focused on sustaining external partnerships while navigating a demanding economic environment.