Energy security in an Era of Regional War

Learning from the Strait of Hormuz crisis 

What if one fine morning you wake up to find that the petrol pump you own has run out of petrol? The CNG station nearby has a queue that goes all the way around the block. Load shedding of electricity has returned in full force. Flour, cooking oil, medicine and transportation are in short supply and prices have skyrocketed. This is by no means a nightmare plot. Today, with the crisis in the Strait of Hormuz unfolding, millions of Asians, many in Pakistan, feel the same.

The majority of people in Pakistan do not even know about the Strait of Hormuz. The Strait of Hormuz is a strip of sea between Iran and Oman at the mouth of the Persian Gulf. It’s 33km wide. But don't be fooled by the size. This small waterway sees some 20 million barrels of oil passing through each day. That’s one-fifth of the world’s oil supply in one passage. Add to that the enormous flows of LNG coming from Qatar and you can see how this little strait has the weight of giants on its shoulders. When that passage closed (as it effectively did at the end of February 2026) the ripples spread out like a stone in a quiet pond. Geographically and economically, Pakistan is more affected than any other country in an area so close to this storm.

To give a reason for the present crisis it is necessary to go back a little into the history of the matter. This row has its roots in years of tension between Iran and western countries over Iran's nuclear programme. The Geneva negotiations collapsed in early 2025. However, in June 2025, Israel began a series of military operations on Iranian nuclear facilities, called “Operation Rising Lion”. There was a kind of peace for several months but things were getting worse around the world.

The explosion occurred on February 26, 28. The USA and Israel carried out joint strikes on Iranian security sites and retaliatory attacks on their naval forces. In retaliation, Iran’s Islamic Revolutionary Guard Corps warned that the two countries were now prohibited from passing through the strait, and boarded and seized merchant ships, and planted sea mines in the trade routes. The Persian Gulf was the hub of world trade one day and a war zone the next. Iranian forces threaten and attack ships that try to go through the strait. The Strait is supposed to officially close in March 2026.

Then, in a further escalation, starting April 13, the United States implemented a naval blockade of Iranian ports triggering a full-blown global energy crisis. The global energy markets were hammered hard and fast. They were close to $72 a barrel at the end of February, and quickly surged above $84 a barrel in 5 trading days. That was just the start of an epic seven-year voyage. After the closure on March 4 the price of Brent crude went up to more than $120 per barrel and Qatar Energy had to say that they could not meet all of their shipments.

Think about what this means. Qatar is the leading exporter of LNG in the world. As Qatar is unable to transport its gas to India, Japan, Germany and elsewhere, they all raced to find substitutes. By March 10, oil production from Kuwait, Iraq, Saudi Arabia and the United Arab Emirates had reportedly declined by 6.7 million bpd, and by at least 10 million bpd by March 12.

The IEA was clear in its message. It was the IEA's "greatest global energy security crisis" and the "largest supply disruption in the history of the global oil market," the IEA said in characterizing it. Officials and Wall Street analysts in America started to contemplate $200-a-barrel oil prices. But the warnings rang constantly from industry sources: the grave reality of what was happening in the world was still not understood.

The world is keeping a close watch on the Strait of Hormuz. Now it is time for Pakistan to begin developing the alternatives so that it will no longer need to rely on it.

Now let's take this home literally. About 80 percent of Pakistan's crude oil imports go through the Strait of Hormuz. This implies that more than 64 percent of Pakistan's total crude oil needs hinge on uninterrupted flow through this waterway which has a disputed history. When that door is shut, Pakistan is not only faced with high prices. It faces the prospect of its fuel supply drying up altogether. Pakistan has only 10-14 days of petroleum stocks which make it the least prepared country in the world for petroleum shocks. Now imagine the developed countries have reserves of 90 days or longer and you will realize the extent of our vulnerability. The figure of financial losses is astounding.

In the worst case scenario, if the Strait of Hormuz shuts down and oil prices rise to $150 per barrel, Pakistan's monthly fuel import bills could go up to $3.5 to $4.5 billion, which will be a threefold jump over the baseline cost. But the harm doesn't end at the petrol station.

The Pakistan Institute of Development Economics estimates that if the oil price continues to rise there is the risk of the inflation rate in Pakistan reaching 15-17 percent if severe disruptions occur. That means the price of everything from a bus ticket to a bag of flour goes up. It is always the low-income groups who are the most affected— those who depend on wages, small business owners, students and the impoverished of the urban masses. Offering a telling glimpse at the extent of the crisis in ordinary life, Pakistan has reportedly requested fans to stay home to watch the cricket matches to help conserve fuel.

This is not a Pakistani issue. The global energy market shifted from "cautious optimism" to an outright "crisis" as it was between December 2025 and May 2026. The closure of the Strait of Hormuz wasn't just about trade lanes, it was a reordering of trade and a new sense of strategic significance for non-Gulf oil producers as well as a rush for any government from Europe to Asia to find alternative oil supplies.

Countries in Asia are suffering. In late March 2026, the Philippines, which gets 98 percent of its oil supply from the Middle East, declared a state of national energy emergency due to its energy supply being threatened by the closure. Vietnam experienced shortage of fuel and panic buying. Japan– as a wealthy nation– was highly vulnerable due to its significant dependence on LNG and Gulf oil.

Refined fuels such as diesel and jet fuel surged to over $200 a barrel at times in recent weeks to give early signs of demand destruction for Asian markets that are heavily dependent on crude oil and liquified petroleum gas from the Strait. The battle is also resonating with something else— something more ancient, more sinister.

The crisis has brought the 1970s energy crisis back with its accompanying severe shortages in supplies, currency instability, inflation, and increased likelihood of stagnation and recession. The 1970s oil embargo is a memory for those who experienced it– queues at petrol stations and hardship. That had seemed a thing of the past to the world. It has not.

It's not just a crisis that I'm reflecting on as a student writing this, but about what it is saying about the world I will inherit. At the heart of the Strait of Hormuz crisis is the issue of dependency. The countries that developed their entire energy systems in reliance on cheap Middle East oil, are now realizing the danger. Pakistan is one of the most vulnerable countries of the world.

The lesson being written in real time during the hike in petrol pump prices is a frightened government and empty petrol pumps, and that energy security is neither a technical nor an economic question. It is a matter of sovereignty, of planning and of political will. If the country can't power its own buses, its factories and its hospitals, then it's not really a country.

It is important that Pakistan does better than waiting for alternatives that have to be sought more urgently than ever before. Solar, wind and hydropower renewable energy is not some far off dream but a real need. The country receives immense solar radiation on the large expanse of her lands. Northern mountains are a source of rivers for hydroelectric power supply. What a war in the Persian Gulf can't steal from us are these resources.

Pakistan should also diversify its energy import channels and sources, develop strategic petroleum stores and invest in the public transport system to reduce the dependency on fuel. These are not merely ideas but they are very important in the current crisis and policymakers would be foolish to ignore them. The Strait of Hormuz which is a 33-kilometre strait between Iran and Oman has always been important. 2026 has shown that the Strait of Hormuz can close and cause problems for the world. This isn't a hypothetical outcome. They show up at our doorstep as hikes in electric bills, higher food prices and the silent worry over whether there'll be gas for tomorrow.

This crisis is not the only problem for Pakistan, which is already dealing with inflation issues, debt and economic instability. The Strait of Hormuz crisis is also a warning that the worlds energy system's fragile. The crisis of the Strait of Hormuz is a challenge for Pakistan and the world. In the few months and years ahead, the young people that will inherit the government, the institutions, yes, the entire country— will make the decisions that will decide whether Pakistan will have an energy future of its own or will always be at the whim of wars it did not provoke and straits it did not create.

The world is keeping a close watch on the Strait of Hormuz. Now it is time for Pakistan to begin developing the alternatives so that it will no longer need to rely on it.