What happened
Petroleum Minister Ali Pervaiz Malik said on Sunday 28 June 2026 that Pakistan was “considering” purchasing cheaper oil and gas from Iran, after the option of sourcing Iranian crude reopened following a temporary easing of United States sanctions on Tehran. Malik, speaking to the media in Lahore, said the government was moving forward in line with its international commitments while also evaluating discounted Iranian supplies.
The option became available after Washington and Tehran signed the “Islamabad Memorandum of Understanding” in Burgenstock, Switzerland, on 17 June, a deal largely mediated by Pakistan. Under the arrangement, the United States was to issue sanctions waivers through the Treasury Department for the export of Iranian crude oil, petroleum products and derivatives, along with related banking, insurance and transportation services, until the sanctions are terminated, The News reported.
By importing discounted Iranian crude and refining it locally into higher-value petroleum products, Dawn reported, Pakistan could save an estimated $170–340 million, assuming it imports 10–20 per cent of its total petroleum requirement at a discount, including freight savings.
Refining and pricing questions
Industry experts cited by Dawn said local refineries are technically capable of processing Iranian crude, but commercial and operational challenges remain. The main obstacles are the high furnace oil yield from Iranian crude and the absence of significant domestic demand for furnace oil, which would leave refiners with a product they cannot easily sell.
Malik said the government remained active on further reductions in petroleum prices and would bring them down further as global markets normalised, while staying within the framework of existing international agreements. He noted that petrol and diesel prices had reached about Rs460 per litre in April at the peak of the Iran–US tensions and had since fallen significantly. He maintained that the reduction in local prices had been greater than the fall in international prices, and that the difficult phase for consumers had passed. On 19 June, Prime Minister Shehbaz Sharif announced a Rs74 cut in petrol prices and a Rs67 cut in high-speed diesel.
Why it matters
Iranian imports would give Pakistan a discounted source of crude at a time when it is trying to contain the cost of imported energy and stabilise domestic fuel prices after a year of war-driven volatility in the Gulf. The arrangement is politically sensitive, however, because it depends on waivers from Washington and on Pakistan’s continued compliance with its international obligations. Analysts have described the reopening of Iranian supplies as an opportunity that could generate hundreds of millions of dollars in savings, but the refining constraints mean any benefit would depend on how quickly refineries can absorb the discounted crude.
What is still uncertain
Malik described the move as under consideration and did not announce a decision, a timeline, volumes or terms. It is not clear whether Pakistan would import crude only or also refined products and natural gas, how much of the savings would be passed on to consumers, or how long the US sanctions waivers will remain in place. The full text of the memorandum of understanding has not been made public.
Sources & reporting notes
This is a summary of published reporting, not independent reporting. Details are as carried by the cited sources, which were reviewed on 2026-06-28.
- Dawn — "Pakistan mulling purchase of cheaper oil, gas from Iran: petroleum minister"28 June 2026 · The minister's statement, the $170–340 million savings estimate and the refining challenges.
- The News — "Pakistan eyes Iranian oil, gas after easing of US restrictions: minister"28 June 2026 · The Islamabad Memorandum of Understanding, the sanctions waivers and the April price peak.
- Business Recorder — "Govt mulling purchasing cheaper oil, gas from Iran: Malik"28 June 2026 · Confirmation of the statement and the stated savings range.
