Global oil shock deepens inflation pressures in Pakistan

Economists have warned that Pakistan’s rising inflation is increasingly linked to surging global oil prices, driven by ongoing conflicts in the Middle East and Europe. With the country importing nearly 80–85% of its petroleum needs, analysts say Pakistan remains highly exposed to external energy shocks

KOHAT, (APP - UrduPoint / Pakistan Point News - 29th Apr, 2026) Economists have warned that Pakistan’s rising inflation is increasingly linked to surging global oil prices, driven by ongoing conflicts in the middle East and Europe. With the country importing nearly 80–85% of its petroleum needs, analysts say Pakistan remains highly exposed to external energy shocks.

According to market observers, recent geopolitical tensions involving the United States, Israel, and Iran have disrupted oil shipments through the Strait of Hormuz—one of the world’s most critical energy routes. Crude prices have reportedly climbed above $110 per barrel, with projections suggesting they could reach $130–150 if disruptions continue.

Experts estimate that Pakistan’s monthly oil import bill has jumped to $3.5–4.5 billion, compared to around $1.

5 billion under stable conditions. They warn that every $10 increase in crude prices adds roughly Rs300 billion annually to the country’s import costs, potentially pushing inflation from 7% to as high as 17%. The impact is expected to ripple across fuel prices, food supply chains, and electricity tariffs, further straining household budgets and widening the trade deficit.

To counter the pressure, analysts recommend urgent diversification into renewable energy, expansion of strategic petroleum reserves, and improved regional energy cooperation with Gulf countries. They also suggest targeted subsidies to shield vulnerable groups, warning that without structural reforms, Pakistan’s economy will remain vulnerable to global volatility and recurring energy-driven inflation shocks.

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