Islamabad, Pakistan – Web Desk: Pakistan has formally requested a $6.7 billion concessionary oil financing facility from Saudi Arabia to mitigate the impact of rising global crude prices amid ongoing Middle East tensions, according to sources in the Ministry of Economic Affairs. The facility would be provided at a 1% interest rate over a 15-year term, with a five-year grace period for repayment[citation:0].
Bilateral Discussions Underway
The Ministry of Economic Affairs confirmed that discussions between the two governments regarding the deferred oil payment facility are ongoing[citation:0]. Saudi Arabia has been supplying oil to Pakistan on a deferred payment basis since 2019, with the latest agreement expiring in April 2025[citation:0].
Pakistan’s request comes as oil prices surged to one-month highs following escalating U.S.-Iran tensions over the Strait of Hormuz, a critical chokepoint for global energy supplies. Brent crude settled at $84.95 per barrel on Wednesday amid concerns over prolonged supply disruptions.
Historical Support and Foreign Exchange Pressures
Since 2019, the Saudi Fund for Development has provided approximately $6.7 billion in financial support for Pakistan’s oil imports. Riyadh has also maintained cash deposits of up to $8 billion in Pakistan, with recent talks held in Islamabad between senior ministers and Saudi officials to broaden economic and energy cooperation[citation:0].
Pakistani officials are reportedly exploring options to reduce external debt repayment burdens, particularly for Chinese energy projects. If a solution is found, the country’s reliance on a new IMF program may diminish after the current arrangement concludes[citation:0].
