18 September 2026PSX Analyst

What $100 oil does to a Pakistani portfolio

Brent was trading near $104.61 on 11 September, with WTI just above $100. Oil has climbed more than 18% this month. Behind the number is the closure of the Strait of Hormuz, the channel that normally carries over a fifth of the world's traded oil, and the International Energy Agency has called the resulting shortfall the largest supply disruption in the history of the global oil market.

That is a sentence about tankers. It becomes a sentence about your portfolio through four steps, and it is worth walking them in order, because most of the commentary jumps straight from the headline to a stock tip and skips the part that actually determines who wins.

Step one: the import bill

Pakistan buys most of its energy. In May, the Prime Minister put the monthly oil import bill at $800 million, against roughly $300 million before the conflict began. Over the full financial year the figure reached $16.86 billion, which overshot the IMF's projection of $15.28 billion by about $1.58 billion.

The rule of thumb analysts here use is that every $10 on a barrel adds somewhere between $1.8 and $2.0 billion to the annual bill once you count crude, refined products, freight and insurance. Freight and insurance are not a rounding error in a shipping war.

Step two: the rupee and the reserves

A bigger import bill is paid in dollars. That draws on reserves and pushes the rupee, which is the mechanism people miss when they treat an oil spike as somebody else's problem. A weaker rupee raises the cost of every imported input, not only fuel, so the effect spreads well beyond the energy sector.

Step three: inflation, and therefore the policy rate

The same rule of thumb says $10 a barrel adds close to a full percentage point to inflation. In the harsher scenarios being modelled around a prolonged Hormuz closure, the monthly import bill triples toward $3.5 to $4.5 billion and inflation runs at 15% to 17%, against the 7% recorded in February.

The State Bank has already responded. The policy rate went to 11.5% in late April and the Monetary Policy Committee left it there on 14 September, citing the war, disrupted fuel supplies, higher freight and insurance costs, and the closure of Hormuz. Its own medium-term target is 5% to 7%, and it expects inflation to sit above that range for the next several quarters.

Hold that thought, because the policy rate is what actually prices equities. A higher rate raises the return available from a government instrument, which is the thing every share on the exchange competes against.

Step four: the share price

Only now does it reach the market, and it does not arrive evenly.

The exploration companies sell the commodity that went up. Oil and gas explorers have been flagged by local brokerages as among the highest-upside sectors going into FY27 for exactly that reason. On a single strong session in September, Pakistan State Oil, Pakistan Petroleum, Attock Refinery, Cnergyico and OGDC between them put 723 points on the index.

On the other side sit the businesses that buy energy rather than sell it. Cement, textiles, autos and consumer goods all run on fuel, electricity and imported raw material, and all of them absorb the cost before they can pass any of it on.

The wrinkle is that the sorting reverses when oil falls. A retreat in crude tends to lift the cost-sensitive names and knock the explorers, so a portfolio tilted hard toward energy is not a hedge against the conflict. It is a bet on the conflict continuing.

And that bet has a serious constituency. At the APPEC gathering in September the prevailing view was that the standoff runs to the end of President Trump's current term, and that the disruption should therefore be treated as a new baseline rather than a temporary premium on top of a normal market.

What this does not tell you

It does not tell you what to buy. The transmission chain above is roughly how the shock travels, but the size of each step is contested, the timing is unknowable, and a ceasefire headline can reprice the whole thing in an afternoon. Anyone offering you a target price on a war has told you more about their confidence than about the oil market.

What it does give you is a way to read the next move. When crude jumps and the index falls, you now know which half of the exchange is doing the falling, and why.

Sources

This is NOT financial advice. Consult a licensed advisor and comply with SECP/PSX regulations.