Pakistan has asked Saudi Arabia to extend a $1.2 billion oil financing facility for another two years as the current arrangement nears its expiry next month. The request aims to keep the facility in place until the completion of Pakistan’s ongoing IMF program, helping ease pressure on foreign exchange reserves.
According to official sources, Islamabad has asked Riyadh to continue the $1.2 billion Saudi Oil Facility (SOF) for another two years, beyond its scheduled expiry next month.
Under the existing facility, Saudi Arabia allows Pakistan to import oil on deferred payment terms, providing around $100 million each month in oil supplies. The payments are settled later, easing immediate pressure on Pakistan’s foreign exchange reserves, a crucial support at a time when reserves remain under strain.
Pakistan and Saudi Arabia have long maintained close economic and strategic ties, with the oil facility forming part of broader financial cooperation during periods of economic stress. The arrangement has been renewed in the past, particularly when Pakistan faced balance-of-payments challenges.
A senior Pakistani economic delegation is currently in Saudi Arabia, where discussions are also underway to expand Saudi investment in Pakistan through the Special Investment Facilitation Council (SIFC). Officials say talks include energy, infrastructure, mining and other priority sectors.
If approved, the extension could provide Pakistan with up to $1.2 billion in additional oil support, potentially running until mid-2027, offering some breathing space as the government navigates tight fiscal conditions.