ISLAMABAD: International oil benchmarks witnessed their most dramatic intraday moves since 2020 on Monday, with Brent crude peaking near $120 per barrel. The surge follows the functional closure of the Strait of Hormuz, a critical chokepoint that typically handles 20% of the world’s oil supply.
In the Asia-Pacific markets, Brent crude futures climbed as high as $119.50, while West Texas Intermediate (WTI) followed closely, jumping over 30% to reach $118.82. The market volatility stems from production cuts by major Gulf producers, including Kuwait and the UAE, who have declared “force majeure” as storage facilities reach capacity due to shipping blockades.
The economic tremors are already hitting Pakistan hard. The federal government recently sanctioned a record-breaking hike of Rs. 55 per litre for petrol and high-speed diesel to align with soaring international rates and IMF mandates. Finance Minister Muhammad Aurangzeb warned that a sustained price surge could add $600 million to the country’s monthly import bill, placing immense pressure on the foreign exchange reserves.
Analysts suggest that while the U.S. and G7 nations are considering a coordinated release of strategic oil reserves, the market remains on edge. Iranian officials have warned that further strikes on energy infrastructure could push prices beyond the $200 mark. For Pakistan, the “petrol shock” is expected to trigger a fresh wave of inflation, impacting transport costs and the prices of essential commodities during the holy month of Ramadan.