Oil companies asked to maintain 20-day stocks as Iran-Israel conflict escalates

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) confirmed on Sunday it has advised oil marketing companies to maintain their mandatory 20-day stock levels, clarifying the country holds “sufficient stocks” of petroleum products as the Iran-Israel conflict intensifies.

Experts have warned of spiraling inflation and global oil supply constraints due to the ongoing Middle East conflict. Concern is focused on potential disruptions in the Strait of Hormuz, through which roughly one?fifth of global oil transits, and weak supply growth from Iran, which produces about 3.3 million barrels per day. Analysts caution any sustained spike could drive up global freight rates, insurance premiums and inflation, particularly in energy?importing countries like Pakistan.

“The Oil and Gas Regulatory Authority (OGRA) has confirmed that the country currently holds sufficient stocks of petroleum products to meet existing demand,” OGRA spokesperson Imran Ghaznavi said in a statement.

“However, in view of anticipated future requirements and the prevailing market situation, OGRA has formally advised all Oil Marketing Companies (OMCs) to ensure the maintenance of their mandatory 20-day stock levels, in line with the conditions stipulated in their respective licenses.”

The spokesperson said OGRA remains committed to monitoring the ongoing situation in the Middle East closely and will continue to take “proactive steps” to ensure national energy security.

Pakistan relies heavily on imported oil, meaning that any sustained spike in prices could widen its current account deficit and push inflation higher at a time when the country is struggling with low foreign reserves and slow growth.

The Israel-Iran conflict started on June 13 when Israel launched a massive wave of attacks targeting Iranian nuclear and military facilities but also hitting residential areas, sparking retaliation and fears of a broader regional conflict.–NNI