Global oil prices soared on Monday, reaching their highest levels since January, following U.S. airstrikes on Iranian nuclear sites over the weekend. The attack has intensified geopolitical tensions in the Middle East and sparked fears of disruptions in oil supply.
As of early Monday, Brent crude jumped $1.92 (2.49%) to $78.93 per barrel, while WTI crude rose $1.89 (2.56%) to $75.73. Earlier in the session, both benchmarks briefly surged over 3%, hitting highs of $81.40 and $78.40, respectively—figures not seen in the past five months.
Iran, a key member of OPEC and the third-largest producer in the bloc, may retaliate by attempting to block the Strait of Hormuz, a vital passageway for nearly 20% of the world’s oil supply. Although Iran’s parliament has approved a measure to close the strait, similar threats have been made in the past without action.
Analysts warn that risks to oil infrastructure are now elevated. According to Sparta Commodities, alternative pipeline routes exist but cannot match the volume transported through Hormuz. Many shipping firms may now avoid the region altogether.
Goldman Sachs cautioned that if flows through the strait are halved for just a month, Brent crude could spike to $110 per barrel, with a lingering impact on prices for up to a year—even if disruptions are short-lived.
Since tensions escalated on June 13, Brent has surged by 13%, while WTI has climbed 10%. However, analysts also note that unless a direct and sustained disruption occurs, current price spikes may eventually stabilize.
Impact on Pakistan:
The sharp rise in global oil prices is likely to affect fuel prices in Pakistan, where domestic petroleum rates are linked to international markets. With Brent crude nearing $79 per barrel, experts predict a potential increase of Rs8 to Rs12 per litre in the next price review, depending on the rupee-dollar exchange rate and government tax policies.
In a worst-case scenario—such as a Brent surge to $110 per barrel—petrol and diesel prices in Pakistan could spike by Rs25 to Rs35 per litre. This would have a cascading effect on transport, electricity, and consumer goods, further accelerating inflation in an already strained economy.
