By SKM
October 30, 2026
ISLAMABAD: Pakistan has offered Saudi Arabia an opportunity to establish commercial oil reserves in the country without local tax liabilities, as the two sides explore deeper cooperation in petroleum storage, refinery modernisation and energy supplies amid concerns over disruptions to global oil trade.
The proposal was discussed during a meeting held on Friday between Federal Minister for Petroleum Ali Pervaiz Malik and Saudi Ambassador to Pakistan Dr. Rajeh bin Tami Al-Baqami, with both sides expressing their commitment to expanding strategic investment and energy cooperation.
Under Pakistan’s newly approved tax-neutral bonded policy, Saudi companies would be able to maintain commercial petroleum stocks in Pakistan, a framework the government hopes will attract investment by offering an alternative regional storage and distribution base comparable to established energy hubs such as Fujairah and Singapore.
The arrangement could provide Saudi Arabia with greater flexibility in managing maritime supply routes and accessing Asian markets, particularly given the strategic importance of the Strait of Hormuz and Bab Al Mandeb to international energy shipments.
Pakistan is also seeking Saudi participation in a proposed petroleum storage and refining complex at Hub in Balochistan, which the petroleum minister said was being developed under the guidance of Technip Energies UK. The planned facility is expected to accommodate Very Large Crude Carriers (VLCCs), potentially strengthening Pakistan’s capacity to handle large crude shipments and supply regional markets, including Central Asia and China.
The discussions also focused on Pakistan’s refinery upgradation programme, which aims to modernise domestic refining facilities, improve efficiency and facilitate a transition to Euro 5 fuel standards. The government sees the programme as an opportunity for Saudi investors to participate in upgrading Pakistan’s petroleum infrastructure.
On the supply side, Pakistan is looking to expand crude oil procurement and secure dedicated liquefied petroleum gas (LPG) shipments from Saudi Arabia to meet domestic energy requirements, particularly during the winter months when gas demand is expected to rise.
Malik thanked Saudi authorities at Yanbu port for prioritising crude oil shipments to Pakistan during recent global market disruptions. He said coordination with Saudi Aramco was also being pursued to explore additional crude cargoes and more reliable LPG supplies.
Beyond the petroleum sector, the two countries discussed expanding cooperation in mining, with Malik inviting Saudi Vice Minister of Mining Khalid al-Mudafier to attend the Pakistan Minerals Investment Forum in Islamabad on November 12-13.
The Saudi ambassador reiterated Riyadh’s commitment to its longstanding partnership with Pakistan, describing the two countries as standing together in all circumstances. He said their defence and energy cooperation frameworks were intended to support regional peace, stability and economic growth.
In a move aimed at facilitating closer commercial and people-to-people links, Al-Baqami also announced that the Saudi Embassy in Islamabad had introduced same-day processing of visa applications for Pakistani citizens.
The latest engagement underscores Islamabad’s efforts to turn its longstanding strategic relationship with Riyadh into greater investment in energy infrastructure, more secure petroleum supplies and expanded access to regional markets. However, the proposed storage and refining projects will depend on the subsequent investment decisions and implementation arrangements. Ends
