Pakistan will raise its imports of liquefied petroleum gas (LPG) from Iran and considers the idea of importing cheaper crude oil from the Islamic Republic, Pakistani Minister of Petroleum, Ali Pervaiz Malik, has said.
Pakistan, which is a key mediator in the U.S.-Iran negotiations, has kept close relations with Iran throughout the latest Middle East crisis, and has relied on negotiating directly with Iran safe passage of LNG carriers from Qatar bound for Pakistan during the crisis.
Now that the U.S. has waived the sanctions on Iranian petroleum sales until August 21, Pakistan is considering the potential of importing crude and boost LPG imports from Iran.
“Our relationship with Iran is one of brotherhood and close neighborliness, and I believe we should make the most of our mutual capabilities,” Minister Malik was quoted as saying by Iranian media.
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According to Pakistani news reports, Malik said that Pakistan was “considering” buying cheaper oil and gas from Iran.
The buying crude from Iran, at discounted prices, could generate savings for Pakistan’s oil import bill, to the tune of between $170 million and $340 million assuming up to 20% of Pakistani petroleum purchases will be made at discounts to international benchmarks, according to the minister.
The Strait of Hormuz crisis and the halt of oil and gas supplies from key Middle Eastern producers, on which Pakistan depends for its petroleum needs, have created an energy crisis in the South Asian country.
The most difficult phase of the crisis has already peaked, and “Good times are coming now,” the Pakistani minister was quoted as saying on Sunday.
Still, Pakistan is looking at how fast (or slow) traffic through the Strait of Hormuz is recovering to manage its energy supplies.
In one of the latest signs that the country isn’t leaving the spot LNG market yet, Pakistan’s state LNG importer is urgently seeking to procure an LNG cargo for delivery this week as traffic through the Strait of Hormuz remains volatile amid persistent threats to tankers and reignited U.S.-Iran tensions.
By Charles Kennedy for Oilprice.com
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