The Pakistan Stock Exchange (PSX) staged a powerful recovery on Thursday, with the benchmark KSE-100 Index soaring nearly 3% after Saudi Arabia assured Pakistan it would facilitate crucial crude oil shipments via an alternative route.
Market Rebounds on Supply Relief
The KSE-100 Index climbed to an intraday high of 160,217.14 points, gaining 4,439.93 points, or 2.85%. This marked a sharp reversal from the previous session’s decline, driven by institutional buying as fears over fuel supply disruptions eased.
“Stocks staged a recovery at PSX amid institutional activity on easing fuel supply fears after Saudi oil supplies through the Red Sea port,” said Ahsan Mehanti of Arif Habib Commodities. He noted that higher global crude prices and optimism over an expected International Monetary Fund (IMF) tranche also supported the bullish sentiment.
Seeking an Alternative Route
The rally followed Pakistan’s urgent request to Saudi Arabia for an alternative oil supply route through the Red Sea port of Yanbu. This move came after Iran announced the closure of the Strait of Hormuz, a critical chokepoint that threatens a major portion of global energy flows and Pakistan’s own supplies.
Federal Minister for Petroleum Ali Pervaiz Malik met with Saudi Ambassador Nawaf bin Said Al-Malki to discuss the crisis. The petroleum division stated that Saudi authorities assured Pakistan that oil supplies could be facilitated through Yanbu to meet its energy needs, with one vessel already assured for dispatch and prioritization of supplies from the port.
Global Oil Markets on Edge
The geopolitical tensions sent shockwaves through global energy markets. Oil prices surged more than 3% on Thursday as the escalating conflict raised fears of prolonged disruptions to Middle East supplies. Brent crude rose to $83.99 per barrel.
Analysts highlighted severe supply-side pressures:
- Iraq, OPEC’s second-largest producer, cut output by nearly 1.5 million barrels per day due to logistical issues.
- Qatar declared force majeure on gas exports, with normal production potentially taking a month to resume.
- Over 200 ships, including oil and LNG tankers, remained anchored off major Gulf producers.
For Pakistan, the Saudi assurance provides a vital lifeline. The bulk of the country’s oil and energy supplies normally transit the Strait of Hormuz, making the development of a reliable alternative route through Yanbu a critical national security and economic priority.
