Pakistan and Saudi Arabia reached a consensus on Friday to enhance bilateral economic relations through deeper strategic collaboration concerning crude oil, liquefied petroleum gas acquisition, refinery modernisations, oil storage, and the mineral industry, based on a briefing released by the Petroleum Division.
The developments were announced after Petroleum Minister Ali Pervaiz Malik met Saudi Arabia’s new ambassador to Pakistan, Dr Rajeh bin Tami Al-Baqami. Commercial engagement, LPG supplies, refinery upgrades, and strategic oil storage were among the mining, petroleum, and energy sector collaboration opportunities reviewed by the two officials.
Did You Know? Pakistan approved a tax-neutral bonded policy modelled on international energy hubs such as Fujairah and Singapore, allowing Saudi companies to establish commercial oil reserves without local tax liabilities.
(1/2) Federal Minister Ali Pervaiz Malik met 🇸🇦 Amb H.E. Dr. Rajeh bin Tami Al-Baqmi to discuss expanding strategic cooperation in oil storage, refinery upgradation, LPG supplies and minerals. The Minister highlighted investment opportunities in Pak’s bonded oil storage pic.twitter.com/ydej04fpeI
Proposed facility strengthens Pakistan regional energy corridor potential
“The proposed facility, supported by the prime minister and the chief of defence forces, will have the capacity to accommodate Very Large Crude Carriers (VLCCs) and strengthen Pakistan’s potential as a regional energy corridor serving Central Asian and Chinese markets,” the statement quoted Malik as saying.
“Under this framework, Saudi companies can establish commercial oil reserves in Pakistan without local tax liabilities, offering an opportunity to diversify maritime transit risks associated with the Strait of Hormuz and Bab al-Mandab while facilitating access to Asian markets,” the statement said.
Bilateral Economic Ties and Visa Processing
Khalid al-Mudafier, Saudi Arabia’s Vice Minister of Mining, received an invitation from Petroleum Minister Ali Pervaiz Malik to participate in the upcoming Pakistan Minerals Investment Forum in Islamabad on November 12 and 13.
Pakistan and Saudi Arabia agreed to strengthen strategic cooperation in areas such as oil storage, refinery upgrades, and crude oil procurement to promote bilateral economic ties and diversify maritime transit risks.
The ministerial talks closely mirrored parallel discussions held by Finance Minister Muhammad Aurangzeb and Ambassador Dr Rajeh Tami Albugamy regarding investment opportunities in agriculture and minerals, as reported by the Finance Division. Both sets of meetings highlighted a shared commitment to turning bilateral political ties into practical commercial outcomes while working toward regional economic goals.
Agreement formalises longstanding defence partnership
The agreement formalised a longstanding defence partnership between Islamabad and Riyadh.
According to the 2026 Global Firepower Index, the alliance has a “combined strength of 1.4 million active troops, 3,400 military aircrafts, 6,000 tanks, and approximately 340 maritime assets.”
Answers to key questions about the energy agreement
What specific energy sectors are covered in the new agreement?
The agreement covers strategic cooperation in oil storage, refinery upgrades, crude oil and liquefied petroleum gas procurement, and the minerals sector.
How does the new policy benefit Saudi companies operating in Pakistan?
Under a newly approved tax-neutral bonded policy modelled on international energy hubs like Fujairah and Singapore, Saudi companies can establish commercial oil reserves in Pakistan without local tax liabilities.
What immediate consular change did Saudi Arabia announce in Islamabad?
Visa applications for Pakistani nationals can now be processed on the same day by the Saudi embassy in Islamabad, a move designed to enhance travel convenience and bolster business, cultural, and people-to-people connections.
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