Oil Supply Fears Grow as Middle East Crisis Escalates
News Desk
Islamabad: Escalating tensions involving Iran, the United States and Israel have once again laid bare Pakistan’s fragile energy security architecture, with industry leaders warning that the country remains dangerously exposed to external shocks.
While global markets react sharply to fears of disruption in the Strait of Hormuz, a critical artery for global oil shipments, local oil sector officials say the crisis highlights a deeper, long-standing vulnerability: the absence of a national strategic petroleum reserve (SPR).
According to industry sources, nearly all of Pakistan’s crude oil and diesel imports transit through the Strait of Hormuz.
Any prolonged blockade or military escalation in the region could not only inflate international prices but also interrupt physical supplies, triggering domestic shortages.
Over the past two days alone, international diesel prices have reportedly surged by nearly 30%, while crude oil has risen by 12–13%.
Officials estimate that if these increases are passed on, domestic diesel prices could climb by Rs40–50 per litre, while petrol may see an increase of around Rs25 per litre.
However, sector representatives caution that price hikes may prove to be the lesser concern.
“The real risk is supply disruption,” one senior official said, noting that Pakistan’s import-dependent energy model leaves little room for manoeuvre during geopolitical crises.
Read More: https://thepenpk.com/petrol-diesel-prices-increased-for-next-15-days/
In response to the evolving situation, the government has directed Pakistan State Oil (PSO) to examine alternative sourcing options for crude oil and diesel. Yet officials acknowledge that rerouting supplies is neither simple nor immediately scalable.
The renewed crisis has revived calls for establishing a strategic petroleum reserve — a buffer stock maintained by governments to cushion against global supply shocks.
Despite repeated feasibility studies and policy recommendations over the years, Pakistan remains among the few major oil-importing nations without a functional SPR system.
Industry experts point out that Pakistan currently holds roughly 25 days of petroleum product stocks in the form of commercial reserves. These inventories, maintained by oil marketing companies, are primarily intended for routine supply management rather than emergency contingencies.
In contrast, strategic reserves are state-managed, capital-intensive facilities that typically store crude oil for use during prolonged crises.
Officials argue that in an increasingly volatile global environment, the failure to operationalise an SPR framework represents not just a policy delay but a national security concern.
They stress that further studies are unnecessary, urging immediate implementation to safeguard the country’s energy supply chain from geopolitical upheavals and market volatility.
As uncertainty deepens in the Middle East, policymakers face mounting pressure to transform long-discussed contingency plans into concrete infrastructure before the next crisis tests the system beyond its limits.
