LAHORE: Pakistan is considering importing cheaper oil and gas from Iran after a temporary easing of US sanctions opened a narrow window for renewed energy trade with Tehran, Petroleum Minister Ali Pervaiz Malik said on Sunday.
Speaking to reporters in Lahore, Mr Malik said the government was actively exploring ways to reduce energy costs and was evaluating the possibility of sourcing discounted Iranian crude.
He claimed that recent cuts in petrol and diesel prices reflected the government’s efforts to provide relief to consumers after a difficult period of high fuel prices. “Good times are coming now,” he said.
The renewed possibility comes after an interim US-Iran understanding led to a temporary relaxation of sanctions and eased tensions in the Middle East, restoring energy shipments through the Strait of Hormuz.
Reuters reported last week that the United States had authorised the sale of Iranian-origin crude, petroleum products and petrochemicals through Aug 21, creating a limited window for buyers to explore purchases from Tehran.
However, the scope for immediate transactions remains uncertain. Asian refiners remained cautious because of uncertainty of sanctions relief, compliance risks and unresolved banking and payment mechanisms.
Pakistan could save an estimated $170 million to $340m annually if it imports 10pc to 20pc of its crude oil requirements from Iran at discounted rates, including lower freight costs.
Industry experts say Pakistan’s refineries are technically capable of processing Iranian crude, although commercial challenges remain because of its relatively high furnace oil yield and limited domestic demand for the fuel.
Despite sharing a nearly 900-kilometre border with Iran and years of discussions on energy cooperation, Pakistan has never been able to regularise large-scale petroleum imports from its western neighbour.
US sanctions on Iran, restrictions on international banking channels and concerns over possible secondary sanctions have discouraged formal state-to-state oil trade and delayed major energy projects, including the long-stalled Iran-Pakistan gas pipeline.
The pipeline project has repeatedly been held up by sanctions-related concerns. Pakistani officials have in the past described the matter as complicated because of international sanctions and said Islamabad wanted to pursue the project without exposing itself to punitive measures.
In the absence of formal trade, a substantial shadow fuel economy has flourished along the Pakistan-Iran border in Balochistan, where Iranian petrol and diesel have for years entered Pakistan through informal channels to meet demand in border districts and beyond.
Fuel is transported through border crossings in Balochistan and, in some cases, by sea routes near Gwadar.
Successive governments have periodically launched crackdowns on smuggling while also exploring legal mechanisms for cross-border energy trade, but sanctions and geopolitical considerations have continued to limit progress.
Mr Malik said the government remained focused on lowering fuel prices, noting that previous increases in petrol and diesel prices had burdened consumers. He argued that the recent reduction in domestic fuel prices was greater than the decline in international oil prices.
On June 19, Prime Minister Shehbaz Sharif announced a Rs74 per litre reduction in petrol prices and a Rs67 per litre cut in high-speed diesel prices as the government moved to pass on the benefit of easing international oil prices after tensions in the Middle East subsided.
Published in Dawn, June 29th, 2026