Saudi Arabia Extends $1 Billion Oil Financing to Pakistan

In a significant financial move, Saudi Arabia has renewed a $1 billion oil supply facility for Pakistan under deferred payments for another year, further strengthening the bilateral economic ties between the two nations. The agreement, which falls under the Saudi Development Fund, is designed to bolster Pakistan’s energy imports.

The $1 billion oil financing, roughly equivalent to Rs290 billion, will continue to support Pakistan’s energy needs. In addition, Saudi Arabia has agreed to roll over $5 billion in deposits held by Pakistan’s central bank, with $2 billion maturing in December 2025 and the remaining $3 billion due in June 2026.

The Saudi financing scheme has already made a substantial impact. According to the Finance Ministry, during the first three months of the current fiscal year, Pakistan received oil worth approximately Rs85 billion ($300 million) under the renewed facility. Saudi Arabia has been providing consistent oil support at a rate of $100 million per month, translating to Rs28.37 billion each month in Pakistani currency.

The Saudi deposits in Pakistan’s central bank carry an annual interest rate of 4%, and they have been rolled over each year, with the aim of stabilizing Pakistan’s external financing position and strengthening its foreign exchange reserves. These funds, which total approximately Rs1.45 trillion, have become a crucial element of Pakistan’s efforts to bolster its economic stability.