Oil Prices Hit Record High – How much could petroleum rates rise in Pakistan?

Oil prices in the international market surged to their highest levels since January after the United States launched airstrikes on Iran’s nuclear sites over the weekend. The move has escalated tensions in the Middle East, raising fears of disruptions in global oil supply.

Brent crude futures rose by $1.92 (2.49%) to $78.93 per barrel, while US WTI crude increased by $1.89 (2.56%) to $75.73. Earlier, both benchmarks had briefly jumped over 3%, touching $81.40 and $78.40—levels last seen five months ago.

Iran, one of the top oil producers in OPEC, could retaliate by closing the Strait of Hormuz, a vital route through which nearly 20% of the world’s oil supply flows. While Iran’s parliament reportedly approved such a move, the country has made similar threats in the past without acting on them.

“The risks to oil infrastructure have significantly increased,” said June Goh of Sparta Commodities, noting that alternative routes can’t fully replace current flows through the strait.

Goldman Sachs warned that Brent could surge to $110 per barrel if shipments through the strait are cut by half for even a month. Although no major disruptions have occurred yet, markets remain tense.

Possible Impact on Prices in Pakistan:

Petroleum prices in Pakistan may rise significantly in the next fortnightly review. With Brent near $79 per barrel, analysts predict petrol and diesel prices could jump by Rs8 to Rs12 per litre. If the conflict worsens and Brent spikes to $110, prices may increase by Rs25 to Rs35 per litre.

Such hikes would not only affect fuel costs but also increase transport and electricity expenses, further fuelling inflation in Pakistan.