Pakistan can’t import cheaper Iranian oil because of sanctions. Is there a case to be made to do it anyways?

Amid a sharp seven-day increase of Rs137.24 per litre in petrol and Rs184.49 per litre in high-speed diesel — pushing prices to Rs458.41 and Rs520.35 per litre respectively — a familiar question has returned to Pakistan’s energy debate: if Iran is right next door and has oil to sell, why does Pakistan not simply buy it?

At first glance, the argument seems difficult to dismiss. Pakistan is an energy-importing country with recurring balance of payments problems, high inflation, and a long history of fuel price shocks feeding into transport, food and industrial costs. Iran, meanwhile, is a neighbouring producer that has for years supplied small amounts of petroleum products across the border through informal channels. In moments of crisis, the temptation is always the same: if the fuel is closer and possibly cheaper, why not formalise what already happens in fragments and use it to reduce the import bill?

But once the question moves from smuggling and small-scale border trade to state-backed commercial imports, the issue stops being a simple pricing matter. It becomes a test of how much economic risk Pakistan is willing to absorb in exchange for cheaper energy. That is because formal oil imports from Iran would not be taking place in a vacuum. They would intersect with sanctions, banking channels, refinery standards, sovereign financing, trade access, and Pakistan’s dependence on external partners. What looks like an energy decision would quickly become a broader geopolitical and macroeconomic one.

That is the real debate. It is not whether Iranian oil exists, nor whether some quantity of it has always found its way into Pakistan. It is whether the Pakistani state can afford to turn an informal reality into formal policy.