Web Desk: Crude Oil prices climbed sharply on global markets after fighting between the Israel-US and Iran disrupted energy flows across the Middle East, raising fears of a prolonged supply shock that could weigh on the world economy.
Brent crude, the international benchmark, was trading around $82 per barrel on Tuesday after briefly jumping more than 10% in volatile sessions. U.S. West Texas Intermediate hovered near $78 a barrel. European natural gas futures also spiked, reflecting concerns about liquefied natural gas (LNG) shipments from the Gulf.
Shipping through the Strait of Hormuz has effectively stalled as tanker operators and insurers reassess risks. The narrow waterway between Iran and Oman handles roughly one-fifth of global oil supplies and a significant share of LNG exports.
Marine tracking data showed dozens of vessels anchored on either side of the channel, while daily transits dropped dramatically over the weekend. Industry executives said shipowners are unwilling to risk vessels or crews amid drone strikes, missile threats and warnings from Iranian authorities.
Energy consultancies estimate that about one-third of seaborne crude exports pass through Hormuz. In addition, nearly 20% of global LNG shipments originate in Gulf states particularly Qatar and must transit the same route.
Meanwhile, energy facilities across the region have come under pressure. Qatar temporarily suspended part of its LNG production after reported drone incidents near key sites, while Saudi Arabia’s state oil company halted operations at a major refinery following damage linked to intercepted projectiles.
Major financial institutions have revised their outlooks upward. Commodity strategists at several global banks now see Brent rising above $100 per barrel if hostilities persist for weeks and regional infrastructure becomes a direct target.
Some analysts say that a near-total closure of Hormuz through mining operations or sustained missile attacks could propel prices toward $150 or even $200 per barrel in an extreme scenario. Others argue that a shorter conflict could limit gains, with crude retreating toward the $60–$70 range if exports resume quickly.
The last time Brent traded above $100 was in the aftermath of Russia’s 2022 invasion of Ukraine, when global energy markets reeled from sanctions and supply fears.
Higher energy prices are already feeding concerns about renewed inflation. Economists estimate that every $10 increase in crude can add roughly 0.3 to 0.4 percentage points to global consumer inflation while trimming economic growth.
In the United States, fuel analysts expect gasoline prices to rise by 10 to 30 cents per gallon in the coming days. European gas prices have also jumped to their highest levels in months, threatening to complicate efforts to stabilize household energy bills.
Beyond oil and gas, commodity traders warn of knock-on effects in agricultural markets. A prolonged halt in Gulf shipping could interrupt about 40% of global urea exports and half of seaborne sulfur supplies used in phosphate fertilizers. Analysts say major importers such as India and China hold limited sulfur inventories, potentially tightening global fertilizer availability within weeks.
In Pakistan, where petroleum products are largely imported, any sustained rally in crude prices would likely translate into higher domestic fuel costs.
Currently, petrol in Pakistan sells at approximately Rs 275 per litre, while high-speed diesel stands near Rs 285 per litre, according to recent government notifications. Officials typically adjust prices on a fortnightly basis in line with global benchmarks and exchange rate movements.
Economists in Islamabad say that if Brent were to cross $100 per barrel, Pakistan’s import bill could swell significantly, putting pressure on foreign exchange reserves and domestic inflation.
While U.S. officials have suggested the conflict may not last long, Iranian leaders have rejected negotiations and vowed to retaliate against further strikes. As both sides dig in, markets remain on edge.
For now, traders say the trajectory of oil and gas prices hinges on a single variable: whether the Strait of Hormuz reopens to normal traffic or becomes the epicenter of a deeper, longer-lasting energy crisis.
