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SHAHID A. KHAN | Editor, TechnoBiz Magazine
Pakistan’s energy security is facing a renewed challenge as geopolitical tensions in the Middle East push international oil prices higher and threaten the stability of global energy supply chains.
On September 1, Brent crude was trading above $91 per barrel as renewed fighting involving the United States and Iran revived concerns about disruptions to oil supplies. At the same time, traffic through the strategically vital Strait of Hormuz remained sharply below normal levels.
For Pakistan, the issue goes far beyond the price of petrol and diesel. Energy is the foundation of transportation, agriculture, manufacturing, electricity generation and virtually every major economic activity. Pakistan remains highly dependent on imported energy, making international oil and gas prices a major factor in the country’s foreign exchange requirements, inflation and economic stability.
Rising Energy Import Costs
The latest figures demonstrate the scale of the challenge. Pakistan’s petroleum import bill rose to approximately $7.7–$7.9 billion during the five months from March to July 2026, compared with around $6.6 billion during the same period of the previous year.
The increase was driven by higher crude and petroleum prices, as well as rising LNG, freight, insurance and security costs.
The Strait of Hormuz has become a critical point of vulnerability. A significant share of Pakistan’s energy supplies originates from the Gulf region and depends on secure maritime transportation.
Recent shipping data showed only five commodity vessels transiting the Strait on Monday, compared with a recent ten-day average of about 14 vessels. No liquid tankers were among those five crossings, highlighting the continuing disruption to energy transportation.
Impact Across Pakistan’s Economy
A prolonged disruption would have consequences across Pakistan’s economy.
Higher international oil prices increase the cost of imported fuel, which in turn raises transportation and logistics expenses. Higher freight costs can increase the prices of food and consumer goods, while energy-intensive industries face additional pressure on production costs.
Airlines, transport companies, agriculture and manufacturing are particularly exposed to increases in fuel prices.
For the government, the challenge is equally serious. A larger energy import bill means greater demand for foreign currency and can put pressure on the current account and external financing position.
Pakistan therefore needs to treat energy security not simply as a petroleum-sector issue, but as an essential component of national economic planning.
Strategic Fuel Reserves
One important response is the development of adequate strategic fuel reserves.
Emergency stocks can provide a buffer when international supplies are disrupted and give the government and industry additional time to adjust. Pakistan has also been examining plans to increase oil storage capacity, an important step toward reducing vulnerability to sudden international supply shocks.
However, strategic reserves alone cannot solve the problem.
Pakistan needs a diversified energy strategy that reduces excessive dependence on imported oil and gas.
Renewable Energy and Domestic Resources
Renewable energy can play an increasingly important role in this transition.
The rapid growth of solar power demonstrates that Pakistani households and businesses are already looking for alternatives to expensive conventional energy.
Solar, wind and hydropower can reduce demand for imported fuels, while greater energy efficiency can lower consumption without reducing economic output.
Domestic gas and emerging technologies such as shale gas could also contribute to long-term energy security if developed economically and responsibly.
Pakistan is preparing to begin horizontal drilling for shale gas, with significant domestic gas resources identified as a potential future source of supply.
Modernising Pakistan’s Refineries
The refining sector represents another important opportunity.
Pakistan’s five major refineries are expected to move toward agreements for major upgrades, with investment potentially reaching billions of dollars.
Modernising domestic refineries can improve efficiency, increase the production of higher-value petroleum products and reduce dependence on imported refined fuels.
A stronger domestic refining capacity could also improve Pakistan’s ability to respond to international supply disruptions.
What Businesses Can Do
The business community also has an important role to play.
Companies can reduce exposure to international energy volatility through:
- Solar energy installations
- Energy-efficient equipment
- Alternative fuels
- Improved logistics
- Better energy-management systems
- Reduced energy waste
- Diversified energy sources
Industries that invest today in energy efficiency and diversified energy sources can strengthen their ability to manage periods of global energy-market instability.
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Diversifying Energy Sources and Supply Routes
Pakistan should also explore broader diversification of its energy suppliers and transportation routes.
Relying heavily on a single geographic region creates strategic vulnerability. Long-term energy planning should therefore consider multiple sources, stronger domestic production, improved storage, modern refineries and alternative transportation corridors.
Energy diversification is not simply about finding additional suppliers. It also involves increasing domestic production, improving infrastructure and developing the capacity to respond quickly when international markets are disrupted.
A Warning — and an Opportunity
The present oil shock should be viewed as both a warning and an opportunity.
Global energy markets are increasingly influenced by geopolitics, climate policies, shipping security and technological change. Pakistan cannot control these external developments, but it can reduce its vulnerability to them.
The future of Pakistan’s economic growth will depend not only on how much energy the country consumes, but on how efficiently, affordably and securely that energy can be produced and delivered.
Energy security must therefore move from being a crisis response to becoming a central pillar of national economic strategy.
For Pakistan, energy independence may remain a long-term goal, but energy resilience is an urgent necessity.
TechnoBiz Magazine
Monthly TechnoBiz Online covers technology, artificial intelligence, business, innovation, science, economy, current affairs and major developments shaping Pakistan and the world.
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