Pakistan's Energy Security Exposed by Iran-US Tensions
The recent tensions between Iran and the US have once again highlighted Pakistan's vulnerability to external energy shocks, prompting renewed debate over the urgent need for a national strategic petroleum reserve.
Pakistan relies heavily on imported oil, with domestic production far below national demand. This makes the country susceptible to fluctuations in international oil prices, which can affect its import bill, foreign exchange reserves, trade deficit, and inflation.
The Strait of Hormuz is a critical waterway for Gulf crude exports, and any prolonged disruption could force Pakistan to seek alternative supplies at higher costs.
Energy experts argue that Pakistan should maintain reserves sufficient for at least 60 days of consumption. The government has accelerated work on the proposal, evaluating options including large storage terminals near ports, underground facilities, and public-private partnerships.
Azhar Siddique, a legal expert, filed a petition in 2020 seeking the establishment of strategic petroleum reserves. He claimed that the court directed the formation of a commission to examine the issue, but its recommendations were not implemented during the PTI government.