Pakistan is exploring alternative options for its oil supply from Saudi Arabia and the United Arab Emirates (UAE) through pipelines in case the Strait of Hormuz is closed due to escalating tensions between Israel and Iran, according to a news report.Â
Saudi Arabia has an existing oil pipeline network, including the East-West Pipeline (Petroline), which transports crude oil from the eastern province to the Red Sea port of Yanbu. The UAE’s Abu Dhabi Crude Oil Pipeline (Adcop) to Fujairah also bypasses the Strait of Hormuz, providing a strategic route for oil exports.
On Monday, Finance Minister Muhammad Aurangzeb chaired the first meeting of a high-level committee tasked with monitoring petroleum prices amid rising regional tensions.Â
According to sources, the Petroleum Division reported that the Strait of Hormuz supplies 20% of global crude oil. If Iran were to close the Strait, global oil supplies, including to Pakistan, could be disrupted. In the worst-case scenario, oil prices could rise to $100 to $150 per barrel.
Despite these concerns, officials stated that there is no immediate threat of higher oil prices and that Pakistan is actively negotiating with international oil suppliers to ensure steady deliveries.
Additionally, Pakistan’s abandoned power plants have furnace oil storage capacity for up to one million tons. Experts suggest the government could store oil in these facilities, and there is a proposal to purchase the storage units, which are currently planned for sale as scrap by the power sector.
Prime Minister Shehbaz Sharif has established the high-level committee to monitor the evolving situation following the Israel-Iran conflict and its impact on the international oil market. The committee, led by Finance Minister Aurangzeb, includes senior representatives from key federal ministries, regulatory bodies, and energy sector experts.
