Pakistan's largest refiner expands US crude imports amid Hormuz disruption

Cnergyico, which first bought US crude last year, is additionally considering spot purchases against longer-term contracts with Vitol and other suppliers based on “pricing, reliability and supply security”, Vice Chairman Usama Qureshi told Reuters.

Cnergyico imported about 8.1 million barrels of US crude over nine months, including 7.1m worth concerning $750m in the fiscal year ended June, Qureshi remarked.

Refiners’ purchased lead US import increases

The country’s US import payments rose by $914m to $3.27 billion in that fiscal year, central bank data shows, making Cnergyico’s purchases equivalent to concerning 80 per cent of the increase.

The refiner could increase US crude purchases if Pakistan’s proposed EXIM Bank trade-finance facility is extended to it, Qureshi stated. Pakistan pitched the facility last month to allow Pakistani buyers to defer payments to US exporters for up to three years.

Pakistan mainly imports oil from Saudi Arabia and the United Arab Emirates, with about 90pc of its oil and liquefied natural gas (LNG) imports passing through Hormuz before the war.

As a new round of protests against inflation and fuel costs erupted this week, rising fuel costs have put pressure on the government to act. Pakistan has also sought alternatives including Saudi crude via Yanbu, located on Saudi Arabia’s Red Sea coast.

According to Qureshi, cnergyico was evaluating a second offshore mooring linked to its storage network to import and export refined products on substantial tankers outside Karachi’s constrained ports, as part of a $1.2bn upgrade to meet Euro V standards, cut furnace-oil output and expand capacity to about 200,000 barrels per day.

Fawad Basir, head of research at KTrade Securities, said Middle East disruptions highlighted the risks of relying on a single supply route.

While a second Single Point Mooring would speed vessel turnaround, using Very Substantial Crude Carriers for US crude could cut freight costs by 25pc to 30pc.