New Delhi, March 20 (IANS) A significant jump in oil prices — due to escalating geopolitical tensions in West Asia — has raised concerns over energy security and economic stability in import-dependent Pakistan, according to a report.
According to Business Recorder, the ongoing conflict has intensified concerns over the safety of the Strait of Hormuz, a key shipping route that handles nearly 20 per cent of global seaborne oil trade.
Pakistan remains particularly vulnerable due to its heavy reliance on imported energy.
More than 80–85 per cent of the neighbouring nation’s oil imports come from Gulf countries such as Saudi Arabia, the UAE and Kuwait, with shipments routed through the Strait of Hormuz.
Meanwhile, petroleum products account for nearly 30 per cent of the country’s total imports.
The report said that a $10 per barrel increase in global oil prices could raise Pakistan’s annual import bill by $1.8-2 billion.
A prolonged disruption, such as a three-month closure of the Strait of Hormuz, could push monthly import costs to $3.5-4.5 billion and drive inflation to 15-17 per cent.
Moreover, higher freight and insurance costs may further widen the trade deficit and strain foreign exchange reserves.
Pakistan’s energy buffers remain limited, with strategic reserves covering only 10-14 days of consumption.
In contrast, India maintains stronger reserves and foreign exchange buffers, providing greater resilience to external shocks, the report added.
The report also warned that any sharp oil price shock could derail Pakistan’s economic recovery, widen the current account deficit and accelerate inflation, particularly as the country stabilises its economy under an IMF programme.
Crude oil prices have surged sharply amid geopolitical tensions. As the West Asia conflict entered its 21st day, Brent crude rose nearly 40 per cent, from $77.74 on March 2 to $108.65 on March 19. Similarly, US WTI crude futures gained 31.91 per cent.
–IANS
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