ISLAMABAD – Amid growing fear of inflation and deficit, global oil prices continue to cimb higher as the US attacked Iranian nuclear sites.
Crude oil prices in the global market soared by more than 3 percent today as the Middle East crisis worsened. The surge in global energy prices is expected to have significant implications for oil-importing countries like Pakistan.
During trading on the first working day of the week, Brent crude oil touched around $80 per barrel, while West Texas Intermediate (WTI) surpassed the $76 per barrel mark as the price of international natural gas also climbed, moving up at $3.90 per MMBtu.
Pak Economy
The sharp rise in oil prices also posed serious challenge to Pakistan’s already fragile economy. Sources familiar with development said a sustained spike in oil prices could worsen the country’s current account deficit and fuel inflation.
If oil prices average $75 per barrel, Pakistan’s current account deficit could increase by $2.3 billion. At $80 per barrel, the deficit could expand by an estimated $2 billion. A further rise to $90 per barrel may lead to a deficit increase of $3.49 billion.
Economists warn that this scenario could undermine Pakistan’s macroeconomic stability, increase import bills, put pressure on foreign exchange reserves, and lead to higher prices of fuel and essential commodities domestically.
| Category | Details |
|---|---|
| Price Movements | |
| Brent Crude | Nearly $80 per barrel |
| WTI Crude | Over $76 per barrel |
| Natural Gas | $3.90 per MMBtu |
| Effect on Pakistan’s Current Account Deficit | |
| At $75/barrel | + $2.3 billion |
| At $80/barrel | + $2.0 billion |
| At $85/barrel | + $3.1 billion |
| At $90/barrel | + $3.49 billion |
With global energy prices on the rise, Pakistan may need to reassess its import strategy, subsidization policies, and external borrowing plans. Experts suggest that immediate diplomatic efforts for regional de-escalation and fiscal measures at home are essential to mitigate the economic fallout.
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