Pakistan Explores Alternative Oil Supply Options Amid Rising Regional Tensions

Strategic Insights -

Pakistan is exploring alternative oil supply options from Saudi Arabia and the UAE through pipelines in case the Strait of Hormuz is closed due to escalating tensions between Israel and Iran. The country's Finance Minister, Muhammad Aurangzeb, has chaired a high-level committee to monitor petroleum prices amid rising regional tensions. The Petroleum Division has reported that the Strait of Hormuz supplies 20% of global crude oil, and Iran closing it could disrupt global oil supplies, including to Pakistan. Officials are actively negotiating with international oil suppliers to ensure steady deliveries, and there is a proposal to store oil in abandoned power plants with furnace oil storage capacity for up to one million tons.

Key Takeaways:

  • Pakistan is exploring alternative oil supply options through pipelines from Saudi Arabia and the UAE to bypass the Strait of Hormuz.
  • The East-West Pipeline (Petroline) in Saudi Arabia and the Abu Dhabi Crude Oil Pipeline (Adcop) in the UAE bypass the Strait of Hormuz.
  • The Strait of Hormuz supplies 20% of global crude oil, and Iran closing it could disrupt global oil supplies, including to Pakistan.
  • Oil prices could rise to $100 to $150 per barrel in the worst-case scenario if Iran were to close the Strait of Hormuz.
  • Pakistan has abandoned power plants with furnace oil storage capacity for up to one million tons, and there is a proposal to purchase these storage units to store oil.
  • Prime Minister Shehbaz Sharif has established a high-level committee to monitor the evolving situation following the Israel-Iran conflict and its impact on the international oil market.
  • The committee is led by Finance Minister Muhammad Aurangzeb and includes senior representatives from key federal ministries, regulatory bodies, and energy sector experts.

Statistics:

  • 20%: The percentage of global crude oil supplied by the Strait of Hormuz.
  • $0 - $150: The potential price range for crude oil if Iran closes the Strait of Hormuz.
  • 1 million tons: The furnace oil storage capacity of abandoned power plants in Pakistan.
  • 20: The percentage of global crude oil potentially disrupted by Iran closing the Strait of Hormuz.

Sources:

  • "Pakistan explores alternative oil supply options amid rising regional tensions." [1]
  • "Muhammad Aurangzeb chairs high-level committee to monitor petroleum prices amid rising regional tensions." [2]
  • "Pakistan's abandoned power plants to store oil in case of Strait of Hormuz closure." [3]
  • "Petroleum Division reports Strait of Hormuz supplies 20% of global crude oil." [4]
  • "Prime Minister Shehbaz Sharif establishes high-level committee to monitor Israel-Iran conflict's impact on oil market." [5]