Will global oil prices surge lead to petrol price hike in Pakistan?

ISLAMABAD: Global oil markets were rattled as blasts in Iran that killed at least 103 fanned fears of the war between Israel and Hamas spreading further.

Oil prices spiked more than three percent after twin bomb blasts ripped through a crowd commemorating Revolutionary Guards general Qasem Soleimani, four years after his death in a US strike, in what Iranian authorities labelled a “terrorist attack”.

Oil prices surged on concerns about Middle Eastern supply following disruptions at a field in Libya and heightened tension around the Israel-Gaza war.

On Thursday by 0310GMT [8:10am PST], Brent futures rose 14 cents, or 0.18pc, to reach $78.39 a barrel, while the US West Texas Intermediate (WTI) was being traded for $72.95 after an increase of 25 cents, or 0.34pc.

Both crude benchmarks settled higher for the for the first time in five days with the biggest daily percentage gain for WTI since mid-November.

Pakistan’s petroleum sector faces 15% sales dip in first half of FY24

On Wednesday, local protests forced a full shutdown of production at Libya’s Sharara oilfield, which can produce up to 300,000 barrels per day. The field, one of Libya’s largest, has been a frequent target for local and broader political protests.

Also on Wednesday, nearly 100 people were killed in blasts at an event to commemorate commander Qassem Soleimani who was killed by a US drone in 2020, as Iranian officials blamed unspecified “terrorists” and vowed revenge.

However, no group has yet taken responsibility for the attack. The US has seen no indication Israel was behind the blasts, White House national security spokesperson John Kirby said.

Swirling regional tensions from the ongoing Israel-Hamas war also continue to support global oil prices.

In Pakistan, consumers face the ominous prospect of petrol and diesel prices surging upwards due to the global oil prices increase in the next fortnight review of petrol prices.

The situation is placing immense pressure on Pakistan’s energy sector, prompting concerns about the nation’s fuel affordability.