Middle East Tensions Threaten Fuel Stability in Pakistan as Global Oil Prices Surge

As tensions in the Middle East intensify, particularly between Iran and Israel, the global oil market is experiencing severe volatility — and Pakistan is already beginning to feel the shockwaves. With international crude prices surging by over 16%, domestic fuel stability has become a major concern.

While the average consumer in Pakistan may only be focused on daily petrol prices, the geopolitical conflict is driving disruptions that extend far beyond the pump. In response, the Oil and Gas Regulatory Authority (OGRA) has mandated all oil marketing companies to maintain a minimum reserve of 20 days’ worth of fuel. This precautionary move aims to stabilize domestic supply, even if international shipments face delays or shortages.

To further safeguard national reserves, Pakistan has authorized the immediate import of 140 million litres of petrol. The first shipment of 70 million litres is now expected to arrive early, on June 26, instead of the previously scheduled July 6 — a swift logistical move to preempt potential shortfalls.

However, international shipping costs are spiking. Freight rates have risen by 15%, while insurance premiums per tanker have increased from $15,000 to $22,000, largely due to heightened risks in the Strait of Hormuz, a key oil transit route. Compounding the problem, reports of GPS interference in the region are causing major delays, forcing vessels to halt or reroute for safety.

Rising Oil Prices Likely to Push Fuel Costs Higher

With most of Pakistan’s fuel sourced from global markets, rising crude oil prices are set to impact local consumers. The Petroleum Development Levy (PDL) — a major revenue source for the government — will remain unchanged, according to official sources. This means any increase in international oil rates will likely be passed directly onto consumers.

Government Monitoring the Situation Daily

Recognizing the gravity of the situation, Prime Minister Shehbaz Sharif has established a high-level committee to monitor fuel prices and inventory levels daily. The goal is to manage disruptions proactively and ensure fuel availability throughout Pakistan, despite mounting global uncertainties.

Broader Economic Risks Loom

This crisis has implications far beyond petrol stations. Economists and political leaders warn that the escalating oil crisis could further strain Pakistan’s fragile economy, widening budget deficits, increasing import bills, and destabilizing the trade balance. Given Pakistan’s existing debt load, the added financial burden of expensive energy imports could significantly hinder recovery and growth prospects.

The Pakistan fuel crisis of 2025, driven by Middle East conflict, is not just a short-term supply concern — it’s a warning sign for broader economic challenges ahead. While swift actions by OGRA and the government offer temporary relief, the underlying risks remain high. As global tensions continue to rise, so too may the cost of keeping Pakistan’s economy running.

Afsheen Gohar

Afsheen Gohar is a seasoned writer with a wealth of experience in crafting authentic and well-researched articles. Her dedication to delivering high-quality content is evident in her work, where she combines a passion for storytelling with a commitment to accuracy and depth. Afsheen’s writing reflects her ability to engage readers with compelling narratives while providing valuable insights on a diverse range of topics.