Pakistan Takes Emergency Measures as Strait of Hormuz Closure Disrupts Oil Supply

Islamabad, Pakistan – March 4, 2026 – Pakistan is implementing a series of emergency measures to stabilize its petroleum markets following the closure of the Strait of Hormuz, a critical waterway for global oil shipments. These measures include potential weekly revisions to fuel prices, financial compensation for oil companies facing increased costs, and fuel conservation strategies like mandatory work-from-home policies.

Strait of Hormuz Closure and Impact on Pakistan

The closure of the Strait of Hormuz has created significant disruptions to global oil trade, with over 20% of global oil cargoes reportedly stranded within the Strait [1]. This has led to a shortage of ships, particularly impacting diesel supplies. Pakistan, heavily reliant on petroleum imports, is particularly vulnerable to these disruptions.

Emergency Measures to Maintain Market Liquidity

To mitigate the impact, the Pakistani government is submitting a summary to the Economic Coordination Committee (ECC) outlining the following key measures [1], [2]:

• Weekly Petroleum Price Revisions: Shifting from a fortnightly to a weekly price revision schedule to more quickly reflect changing market costs and avoid financial strain on oil marketing companies (OMCs) and the government.
• Compensation for Oil Companies: Providing financial assistance to oil companies to offset soaring insurance costs and import premiums. Insurance costs have surged from approximately $30,000 to $400,000 per ship, with import premiums currently around $3-5 per barrel [1].
• Fuel Conservation Measures: Implementing fuel conservation strategies, including mandatory work-from-home policies for both the public and private sectors where feasible.

Securing Alternative Supply Routes

Despite having current petrol and diesel stocks sufficient for 26 and 25 days respectively [1], Pakistan is proactively seeking alternative supply routes. The state-run Pakistan State Oil (PSO) has launched import tenders for petrol and diesel from sources outside the Strait of Hormuz [1], [2]. Saudi Arabia has also been requested to provide oil supplies via the Red Sea route [1].

Government Coordination and Monitoring

The government has established an 18-member cabinet committee to monitor petroleum prices and ensure supply stability [3]. All provincial chief secretaries have been directed to attend a meeting on Thursday to discuss the proposed national action plan. Finance Minister Muhammad Aurangzeb chaired a meeting of the cabinet committee to review the evolving energy situation and assess stock levels and supply chains [1].

Addressing Supply Concerns and Hoarding

Whereas current stocks are adequate, the Oil and Gas Regulatory Authority (Ogra) and OMCs have jointly decided to regulate supplies to dealers and retailers based on their 8-month track record to prevent hoarding and supply disruptions [1]. Ogra has reassured the public that there is no shortage of petrol or diesel and urged citizens to rely on official information channels.

Looking Ahead

The Pakistani government remains committed to ensuring the uninterrupted availability of petroleum products and is actively exploring all available options to mitigate the impact of the Strait of Hormuz closure. Continued vigilance, coordination with international partners, and prudent energy use will be crucial in navigating this challenging situation.