Oil Prices Surge Past $107 as Middle East Conflict Rattles Global Markets — Pakistan Feels the Pinch at the Pump
International Oil prices remain elevated on prolonged US-Iran tensions, and Pakistani consumers are already absorbing the impact through repeated petrol and diesel hikes by Government.
Global oil markets remain under pressure as the ongoing conflict between the United States and Iran continues to threaten the Strait of Hormuz — the corridor through which roughly a fifth of the world’s oil supply moves each day. The escalation deepened further in mid-September when Saudi Arabia was forced to shut down its critical East-West Pipeline — a 1,200-km pipeline that carries crude from the kingdom’s eastern oil fields to the Red Sea port of Yanbu, and which had become Riyadh’s principal bypass route while the Strait of Hormuz remained disrupted. The pipeline was hit by multiple drones launched from Iraqi territory, causing injuries and damage at pumping stations near Riyadh and Madinah; Baghdad has opened an investigation, and no group has formally claimed responsibility. Traders warned that a prolonged closure could remove as much as 4% of global oil supply from the market. In a related but separate development the same week, Yemen’s Iran-aligned Houthi forces seized Perim Island at the mouth of the Bab el-Mandeb Strait — the narrow passage linking the Red Sea to the Gulf of Aden — consolidating control over another vital artery for global energy shipping and raising fresh concerns over the safety of tanker traffic between Europe and Asia. The twin developments underscored how the conflict has widened well beyond the Strait of Hormuz, with multiple choke points now exposed to disruption simultaneously.
Brent crude, the international benchmark, has repeatedly touched multi-month highs in recent weeks, with prices hovering near $107 a barrel as traders price in the risk of prolonged supply disruption
How This Is Hitting Pakistan
For Pakistan, which imports the bulk of its crude and refined fuel, the global spike has translated directly into a string of price hikes at the pumps across the country. Since switching to a daily pricing mechanism in July 2026, the Oil and Gas Regulatory Authority (OGRA) has revised rates repeatedly through September as the Middle East conflict pushed international benchmarks higher.
According to the most recent notification, prices of petrolum products in Pakstan are as follows;
- Petrol (Motor Spirit): Rs390.12.24 per litre
- High-Speed Diesel (HSD): Rs414.75 per litre
On September 1, price of petrol stood at Rs343.87 per litre and diesel at Rs370.92 — meaning the price of both fuels has climbed by roughly Rs40-50 per litre in under a month, tracking the surge in Brent crude.
Government Response: Targeted Relief
Recognising the strain on lower-income households, Prime Minister Shehbaz Sharif announced a special relief scheme alongside the September 14 price hike. Under the scheme:
- Motorcycle, rickshaw, and Qingqi users get a Rs100-per-litre relief on up to 20 litres of petrol per month
- Owners of small cars (up to 800cc) get the same Rs100-per-litre relief on up to 30 litres per month
The scheme was rolled out first in Islamabad Capital Territory before being extended nationwide, including AJK and Gilgit-Baltistan, with registration opened to the public.
About the Author
