Pakistan has secured an agreement with Iran allowing additional Pakistani-flagged vessels to pass through the Strait of Hormuz. Deputy Prime Minister and Foreign Minister Senator Ishaq Dar announced that 20 more Pakistani ships would be facilitated, with two vessels crossing daily. This move is expected to enhance peace and stability in the region and improve Pakistan's logistics for fuel supply, ensuring timely deliveries to refineries. Adviser to the Finance Minister Khurram Schehzad noted that Pakistan's fuel reserves have increased to cover over four weeks of supply, describing the situation as stable and improving, with supplies for March and April fully secured.
Despite global supply pressures, Pakistan has avoided disruptions seen elsewhere, largely due to improved logistics and priority facilitation through the strait. Schehzad emphasized that crude oil inflows are consistent and are being refined into petrol and diesel, assuring the public that fuel stocks will not decrease. The government is managing petroleum costs through austerity measures and expenditure cuts, rather than subsidies, including a 20% reduction in employee-related spending and cuts to development projects. Additionally, conservation measures like reduced government fuel usage and work-from-home policies have further eased supply pressure.
Pakistan is also in discussions with Iran regarding permitting oil tankers to pass through the Strait of Hormuz, with four Pakistani tankers reportedly awaiting this permission. Pakistan is also attempting to purchase oil from Russia. While some ships carrying Iranian oil have recently signaled Pakistan as their destination, analysts believe these vessels might be using Pakistani waters as a secure location to wait or transfer cargo, rather than intending to discharge Iranian oil into Pakistan, to avoid US sanctions. Pakistan has not imported Iranian crude in at least a decade, according to data intelligence firm Kpler.
Separately, Kuwait has agreed to use Pakistani vessels to transport essential diesel and jet fuel shipments, with Pakistan securing 20 cargoes via Iran's provided "safe passage." This development is expected to create a one- to two-month buffer against regional supply shocks and help stabilize local fuel prices. This comes as Pakistan faces challenges in gas supply, with Qatar's supply completely suspended and only two of eight scheduled gas cargoes arriving in March due to geopolitical issues, potentially leading to gas shortages after April 14.
