Pakistan seeks revival of $1.2bn Saudi oil facility

Pakistan seeks revival of $1.2bn Saudi oil facility

Pakistan has raised the revival of a $1.2 billion annual oil facility on deferred payments with Saudi Arabia, as both countries explore ways to strengthen energy cooperation.

Finance Minister Muhammad Aurangzeb discussed the matter with Saudi Fund for Development (SFD) Chief Executive Officer Sultan Abdulrahman Al-Marshad on Tuesday on the sidelines of the World Bank and International Monetary Fund (IMF) annual meetings in Thailand.

The Ministry of Finance shared details of the meeting but did not mention the oil facility or disclose the Saudi response. Khurram Schehzad, adviser to the finance minister, also did not respond to a query on the matter. However, people familiar with the discussions said Saudi Arabia was examining Pakistan’s request.

According to the ministry, Aurangzeb highlighted Pakistan’s improving macroeconomic position and renewed access to international capital markets.

The discussions covered opportunities to expand trade and investment, increase private-sector engagement, follow up on the bilateral investment protection agreement and explore refinery upgrades.

Both sides also reviewed progress on SFD-supported projects and stressed the need to develop a new pipeline of projects. The SFD reaffirmed its continued support for Pakistan within its mandate, the ministry said.

Saudi Arabia has separately provided Pakistan with $3 billion in short-term financial support through the SFD. The Kingdom extended the facility for another three months in July.

Since 2019, Saudi Arabia has supported Pakistan through an oil financing arrangement that allows Islamabad to make payments after a one-year period. The latest facility, signed in February 2025, expired in April.

The government is now seeking a longer-term financing arrangement to ease immediate external financing pressures and reduce the need for short-term borrowing.