Can Pakistan buy cheaper oil from Iran? Here's what to expect

ISLAMABAD: Can Pakistan buy cheaper oil from Iran? The possibility has come under discussion following recent developments involving Iran, with experts saying Pakistan could save on transportation costs but is unlikely to import Iranian crude at prices significantly below the international market.

Talking in ARY News program The Reporters, Iran is expected to sell crude oil at prevailing global prices rather than offering Pakistan a substantial discount. However, Pakistan could benefit from lower freight charges because of its close proximity to Iran, while more flexible payment arrangements may also be possible if bilateral trade expands.

The discussion has also renewed focus on the long-delayed Iran-Pakistan gas pipeline, which is widely seen as offering greater long-term economic benefits than discounted oil imports. Once completed, the pipeline could help supply natural gas to industries and gas-fired power plants, easing Pakistan’s energy shortages.

Iran has already completed its section of the pipeline, but Pakistan has yet to begin construction on its side. The project is estimated to cost between $2 billion and $3 billion, making it a long-term infrastructure project rather than an immediate solution to the country’s energy needs.

Experts also believe stronger trade ties with Iran could benefit Pakistan beyond the energy sector by increasing cross-border trade, improving business opportunities and expanding the exchange of food products and other goods between the two neighbouring countries.