Pakistan to receive $1.2bn Saudi oil facility, disbursement begins this month

Pakistan is set to receive a $1.2 billion oil financing facility from Saudi Arabia, with disbursements of $100 million per month beginning in March 2025, The News reported. 

The arrangement, which will continue until February 2026, is expected to ease the country’s energy financing burden.

Prime Minister Shehbaz Sharif’s visit to Saudi Arabia on Wednesday coincided with the launch of the Saudi Oil Facility (SOF). The financing will support Pakistan’s oil imports, helping to stabilize energy costs amid external financing challenges.

The facility is part of broader financial cooperation between Pakistan and Saudi Arabia, which has already placed $5 billion in deposits with the State Bank of Pakistan (SBP). The SOF is expected to provide crucial relief to the country’s foreign exchange reserves by reducing the immediate need for dollar outflows on oil imports.

The government had been in talks with Saudi authorities to revive the facility, which had previously been used in past economic support agreements. Officials expect the disbursements to be completed as per schedule, providing much-needed liquidity for the country’s energy sector.