Iranian Oil and Pakistan

 Is Iranian Oil Worth it 

Oil Reserves of Iran

Iran holds some of the world’s largest deposits of proved oil and natural gas reserves, Iran ranked as the world’s 3rd largest oil and 2nd-largest natural gas reserve holder in 2021.By the end of 2021, Iran accounted for 24% of oil reserves in the Middle East and 12% in the world. 

Iran's crude oil production dropped to lowest in 2020 due to under investment and US lead west sanctions. Further the Covid Pandemic damaged the oil supply.

Sanctions on Iran

There have been a number of sanctions against Iran imposed by a number of countries, especially the United States, and international entities. Iran was the most sanctioned country in the world until it was surpassed by Russia following its invasion of neighboring Ukraine in February 2022.

Sanctions by the United States were reinstated in November 2018, and expanded in 2019 and 2020 to cover Iran's financial sector. Temporary waivers were granted to some countries to continue importing reduced amounts of oil from Iran until 2019.

On 21 February 2020, Iran was placed on the FATF blacklist.

Reason Why Pakistan Can't import from Pakistan 

Iran is one of the largest producer of oil and gas and Pakistan relay on oil imports heavily. Any Increase in the price of oil in international market bring a new wave of inflation for the Country. So why don't Pakistan import oil and gas from Iran that us it's immediate neighbor.

Let's look at few reasons

US Sanctions 

US has heavily sanctioned Iran since 1979  after the US  Embassy incident. 2019 onwards the sanctions increased even more after US President Donald Trump backed from the Iran Nuclear deal. Pakistan's economic situation can not with stand any unwanted attention in the form of sanctions from US.

Pak-Saudi Relation

Pakistan and Saudi Arabia have very friendly relations from decades. Saudi Arabia has helped Pakistan in every situation and at every forum that may be financial, International or Oil on deferred payment. Iran and Saudi are rivals and are at proxy war against each other in Yemen. So any Oil deal can struck Pakistan Saudi relations.

Low Cost Of Saudi Arabian Oil

The difference of cost between Iranian and Saudi Oil is very less. Iranian oil will be transported through road. Saudi Oil is transported trough sea route. So the difference between the oil cost is not very much.

Iranian low grade oil

Iranian oil is low grade than International standards because Iranian Oil refineries are not upgraded since 1970 due to the US sanctions. Iranian oil has high sulfur content that can damage vehicle engines.