ISLAMABAD – In a move that has sent shockwaves through energy-hungry Asian economies, Iraq has officially commenced the shutdown of its largest oil production facilities, including the world’s second-largest field, Rumaila. The development comes as a direct consequence of the escalating tensions in the Strait of Hormuz, which have effectively paralysed maritime oil transit.
The $100 Barrel Returns. The 2026 Iraq oil crisis has reignited fears of triple-digit oil prices. On Tuesday, Brent crude futures surged by over 7% to reach $83.4 per barrel, while West Texas Intermediate (WTI) climbed 7.65% to $76.7. Financial analysts suggest that if the deadlock in the Middle East continues, the $100-per-barrel mark is no longer a matter of “if” but “when.”
Logistical Collapse and Security Threats According to Iraqi state agencies, production at the West Qurna 2 field has also been curtailed, with approximately 460,000 barrels per day (bpd) now offline. While regional geopolitics remain volatile following recent US-Israel actions against Iran, Iraqi officials have pointed toward a logistical nightmare: a critical shortage of available tankers and disrupted navigation routes. Southern export terminals have reportedly reached maximum storage capacity, leaving producers with no choice but to stop the pumps.
Adding to the Global Oil Price Surge, a drone strike recently targeted the Port of Fujairah in the UAE. As the region’s largest export hub situated outside the Strait of Hormuz, the attack has raised alarms regarding the vulnerability of the entire Gulf energy infrastructure.
Impact on Pakistan: Rising Inflation Fears. For the Pakistani public, the timing of this crisis is particularly concerning. The Strait of Hormuz accounts for nearly 20% of the world’s oil supply, and any prolonged disruption directly threatens Energy Security Pakistan.
Industry experts warn that if global prices continue their upward trajectory, the government may be forced to implement a significant hike in Pakistan’s petrol prices during the next fortnightly review. This could trigger a fresh wave of inflation, affecting transport costs and the prices of essential commodities nationwide.
As Asian buyers—including Pakistan’s neighbours—scramble to find alternative energy sources, the pressure on the global supply chain is reaching a breaking point. For now, the eyes of the world remain fixed on the Middle East, waiting to see if diplomatic channels can reopen the vital waterways before the global economy takes a further hit.