ISLAMABAD — Saudi Arabia and Kuwait will construct strategic petroleum reserves in Pakistan with capacity for 17 million barrels of oil, marking the first dedicated strategic storage infrastructure in a country that has faced repeated energy crises—but raising questions about sovereignty and influence.
Under the agreement, Times of Islamabad reports, Kuwait will develop facilities for 7 million barrels while Saudi Arabia will establish 10 million barrel capacity. The Gulf states will finance construction and potentially pre-position their own crude oil in Pakistani territory—oil that could be released during supply disruptions or price spikes.
For Pakistan, a country of 240 million people that imports over 80 percent of its oil and has faced devastating fuel shortages during foreign exchange crises, strategic reserves represent genuine energy security. The country currently has no dedicated strategic petroleum reserves, leaving it vulnerable to supply shocks and price volatility.
But there is no free lunch in geopolitics. The question energy policy experts are asking is: What does Pakistan give in exchange for this infrastructure investment?
"Strategic petroleum reserves on your territory, owned and operated by foreign states, is not just an energy security arrangement—it is a sovereignty question," said Sakib Sherani, economist and former adviser to Pakistan's finance ministry. "What happens if Pakistan's foreign policy interests diverge from Saudi Arabia's? Can Riyadh restrict access to oil stored on Pakistani soil?"
The Gulf states' investment comes as Pakistan navigates a difficult geopolitical balancing act. The country maintains close ties with and , both of which have provided crucial financial support during Pakistan's repeated balance-of-payments crises. Saudi Arabia alone has deposited billions in Pakistan's central bank to shore up foreign exchange reserves during IMF program negotiations.

