A sharp rise in global oil prices could prompt Pakistan to increase its local oil and gas output, as supply disruptions in the Middle East continue to strain international energy markets, according to a research report by Topline Securities.
The report highlighted that Brent crude prices have surged nearly 70 percent over the past month, including a dramatic 25 percent jump on March 9. The increase has been driven by disruptions in global supply chains and tensions along critical shipping routes, including the Strait of Hormuz.
Analysts noted that while rising oil prices could raise Pakistan’s petroleum import bill, they may also incentivize policymakers to support local exploration and production companies in expanding output. Currently, domestic production meets only around 15 percent of the country’s total oil demand.
The report also pointed out that Pakistan’s crude oil and natural gas production has declined by roughly 16 percent and 21 percent, respectively, over the past five years. This decline has been attributed to cash flow constraints caused by circular debt, reduced focus on high-risk exploration projects, and enforced production cuts to accommodate contracted regasified LNG supplies.
According to Topline Securities, the current market conditions present an opportunity for energy companies to restore previously curtailed production and bring new fields online. However, analysts stressed that long-term growth will require government assurances that production will not be cut again once market conditions stabilize, along with easing restrictions on third-party gas sales.
The report estimated that major energy companies have faced significant forced production reductions, including approximately 91 mmcfd of gas and 1,790 barrels per day of oil at Oil and Gas Development Company Limited and around 40–50 mmcfd of gas at Pakistan Petroleum Limited.
If curtailed production is restored, the report forecasts potential earnings gains of around Rs. 3.90 per share for OGDC, Rs. 3.46 per share for PPL, Rs. 5.88 per share for Mari Petroleum, and Rs. 5.68 per share for Pakistan Oilfields.
