I can stand at a petrol station in Karachi and see nothing that resembles a war.
Motorcycles crowd around the pumps. Cars edge forward. An attendant watches the meter and asks for payment. Another customer checks his phone before filling his motorcycle.
Yet the price of that fuel is being shaped by events more than a thousand kilometres away.
A tanker attacked near the Strait of Hormuz does not have to be carrying Pakistani oil. Iran does not need to achieve a total shutdown of the waterway. Pakistan does not have to fire a shot.
For Pakistan, this is no longer a risk scenario.
The transmission has already begun.
Visible commercial traffic through Hormuz has collapsed from normal pre-war levels. Reuters reported only 17 commodity-vessel crossings during the weekend of September 19-20, compared with 37 the previous weekend. Before the conflict began on February 28, roughly 125 large commercial vessels normally crossed each day. Some vessels are apparently travelling without normal tracking, so visible traffic does not capture everything moving through the strait.
Then came a detail that should interest every Pakistani.
The Shandong Redwood, carrying LNG loaded at Qatar’s Ras Laffan terminal, passed through Hormuz on September 19.
Its destination was Pakistan.
Suddenly Hormuz is not an abstract line on a geopolitical map. It is part of Pakistan’s energy supply chain.
Hormuz Is Not Operating Normally
For years, discussion about Hormuz followed a familiar script. Iran threatens the strait. Oil markets become nervous. Analysts debate whether Tehran can close it. Eventually attention shifts elsewhere.
The present crisis is different.
The useful distinction is no longer simply between an open strait and a closed one. Normal commercial movement has been severely disrupted, while energy continues to move through extraordinary arrangements.
Before the conflict, roughly one-fifth of global petroleum liquids consumption moved through Hormuz. The waterway also handled around a quarter of internationally traded LNG, making disruption there a problem far beyond the Gulf, according to the IMF.
The scale of the change is extraordinary.
The U.S. Energy Information Administration estimates that total oil flows through Hormuz fell from 21.6 million barrels per day in the fourth quarter of 2025 to 4.9 million barrels per day during the second quarter of 2026. LNG flows dropped from 10.5 billion cubic feet per day to 0.8 billion.
Yet oil has not stopped moving completely. The industry has improvised.
Tankers perform ship-to-ship transfers outside the strait. Some vessels shuttle crude through dangerous waters and transfer their cargo near Oman. Other movements may occur without normal AIS tracking.
September oil exports through Hormuz recovered to around 6.5 million barrels per day through these unusual arrangements, according to Reuters.
It works.
It is also expensive.
Reuters reported benchmark freight rates above $30 per barrel for a very large crude carrier moving Gulf oil to China. Before the war, freight represented only a small fraction of the delivered cost.
That distinction matters for Pakistan.
We often watch Brent crude as though it were the petrol-pump price written in another currency. It isn’t.
Pakistan ultimately pays for delivered energy. Freight charges rise. Insurance becomes more expensive, while a regional risk premium can push the delivered price higher still.
A barrel does not become cheap merely because it survives the journey.
Pakistan Cannot Declare Economic Neutrality
Pakistan can try to remain outside a regional war.
Its import bill cannot.
The IMF put the exposure rather starkly in its April 2026 assessment. Pakistan is a net importer of oil and gas, leaving the economy particularly vulnerable to a Middle Eastern energy shock.
More strikingly, the IMF estimated that 81 percent of Pakistan’s fuel imports came from Gulf Cooperation Council suppliers. It also found Pakistan was being affected not only by higher international energy prices but by regional premiums above international benchmarks, particularly for refined petroleum products.
There is the mechanism.
Pakistan does not have to lose access to every Gulf cargo. The cargo merely has to become more expensive.
The State Bank recognised the seriousness of the situation in April. It changed foreign-exchange procedures to facilitate imports of crude oil, petroleum products and LNG amid the geopolitical disruption.
Pakistan’s dependence on imported energy is hardly new.
The State Bank’s annual report noted that even when the country’s energy import bill fell by 5.8 percent in FY2025, petroleum import volumes remained broadly unchanged in recent years. It warned that import dependence increases the external account’s sensitivity to international energy prices.
March 2026 trade data gives some idea of the scale.
Pakistan imported about Rs181 billion of crude petroleum during that month. Petroleum products accounted for roughly another Rs116 billion, according to the Pakistan Bureau of Statistics.
A larger energy bill consumes more foreign exchange. If the wider shock also puts pressure on the rupee, the same dollar-priced cargo becomes still more expensive domestically.
Eventually the shock travels inland.
Hormuz Does Not Need a Total Shutdown
I think this is the part Pakistan needs to understand better.
We tend to imagine disruption as an on-off switch.
Strait open: safe.
Strait closed: crisis.
Shipping does not work like that.
A shipowner decides whether a voyage justifies the risk. The insurer puts a price on that danger. Traders then incorporate additional costs and possible delays into their decisions.
The market starts charging for insecurity long before every ship becomes physically incapable of passing.
On September 21, only two commodity vessels were visible crossing Hormuz, according to preliminary tracking data reported by Reuters. Two other vessels had recently been struck in separate incidents. Responsibility for those attacks had not been established when Reuters reported them.
Energy still moved. But normality did not return.
That distinction matters. Pakistan pays for the extraordinary measures that keep cargoes moving too.
LNG May Be the More Uncomfortable Story
Oil receives most of the headlines because everyone understands petrol. Gas deserves equal attention.
Qatar has historically been central to Asian LNG supply, including Pakistan’s. The Hormuz crisis has disrupted those flows, while attacks on Qatar’s Ras Laffan complex have damaged production capacity.
Reuters reported in September that Asian spot LNG prices had risen from a pre-war range of around $10 per million British thermal units to nearly $30. High prices pushed Asian buyers towards alternatives and suppressed demand among customers unable to absorb the increase.
Pakistan LNG CEO Masood Nabi told Reuters that Pakistani demand could recover if additional supplies brought prices back to affordable levels.
Pakistan still needs LNG. At nearly $30 per million BTU, however, need and affordability become two very different things.
Pakistan has partly reduced its vulnerability through rapid solar adoption, especially among electricity consumers able to generate some of their own power. Gas still matters elsewhere in the economy.
Qatar’s problem may also survive the shooting.
QatarEnergy said on September 21 that damage at Ras Laffan had knocked out 17 percent of the country’s LNG capacity. Repairs to two damaged LNG trains could take as long as three years. The company said disruption at Hormuz was also interfering with equipment deliveries for its North Field expansion.
Pakistan therefore faces uncertainty over physical supply and price. A cargo getting through Hormuz solves little if Pakistan cannot afford to buy enough of it.
The IMF Has Already Run the Stress Test
We do not need to manufacture frightening numbers.
The IMF has already modelled the economic transmission.
Under its April baseline, the Middle East conflict was expected to reduce Pakistan’s GDP growth by about 0.2 percentage points in FY2026 and 0.6 points in FY2027 compared with the pre-conflict baseline.
Average inflation was estimated to rise by roughly half a percentage point in FY2026 and 1.5 points in FY2027. The current-account balance was projected to deteriorate by around 0.2 percent of GDP in FY2026 and 0.4 percent in FY2027.
Its adverse scenario was considerably worse.
The IMF estimated a cumulative GDP hit of roughly 1.5 percentage points by FY2027. Current-account deterioration in FY2027 could reach around 1.5 percent of GDP relative to the pre-conflict baseline.
These numbers describe stress scenarios rather than certain outcomes, but the economic mechanism behind them is already visible.
We can see part of it at Pakistan’s petrol pumps.
Pakistan Is Already Subsidising the Shock
We do not have to speculate about whether higher energy costs will eventually force Islamabad to intervene.
It already has.
On September 14, the Economic Coordination Committee approved the Prime Minister’s Fuel Relief Scheme, with around Rs75 billion allocated for a three-month programme. The government linked the intervention to higher petroleum prices and designed it as targeted relief rather than a universal petrol subsidy. See the Ministry of Finance releases.
Motorcycle, rickshaw and Qingqi users can receive Rs500 in petrol relief each week, giving them up to Rs2,000 over four weekly tokens.
Owners of eligible non-commercial cars with engines of up to 800cc can receive Rs1,000 every ten days, based on Rs100-per-litre relief on 10 litres. The monthly ceiling is effectively 30 litres, or as much as Rs3,000 in relief.
One vehicle is allowed for each eligible owner or user.
The government subsequently changed some of the motorcycle rules after complaints. A rider no longer has to purchase five litres in a single transaction to receive the benefit. The eligible age of two- and three-wheelers was extended from 15 years to 20 years.
Another change is socially important. Motorcycle and rickshaw users of rented vehicles can now qualify without satisfying the original ownership requirement, Radio Pakistan reported.
By September 25, IT Minister Shaza Fatima Khawaja said more than 5.8 million people had registered. Around 6.1 million tokens had been generated, while approximately 4.7 million people had obtained fuel through the programme.
I find those numbers more revealing than another speech about international oil markets.
They show the transmission mechanism operating almost in real time.
A military confrontation disrupts Gulf energy flows. Pakistan pays more to keep energy moving towards its economy.
Then Islamabad pays again to shield selected consumers from part of the increase.
The missile may fall hundreds of kilometres from Karachi.
The subsidy is paid in rupees.
A Rs500 Token Does Not Make the Cost Disappear
A motorcycle in Karachi is often not discretionary transport. It takes a worker to his office. A delivery rider depends on it for his income. A father may simply need it to reach the market.
For someone using a motorcycle every day, Rs2,000 a month therefore matters. A family running an old 660cc or 800cc car can similarly gain some protection from expensive petrol.
But Pakistan still has to finance that protection.
The targeted fuel scheme was allocated around Rs75 billion for three months.
There is another government intervention that must be kept separate.
The ECC also approved a Rs100 billion technical supplementary grant for the Prime Minister’s Austerity Fund 2026. The government said the money would meet petroleum price-differential requirements and cushion consumers against price volatility associated with Gulf developments.
It is being financed through the rationalisation and surrender of Public Sector Development Programme funds.
The distinction matters. The Rs75 billion programme provides targeted fuel relief. The Rs100 billion allocation addresses broader petroleum-price volatility.
Neither makes the underlying imported energy cost disappear.
Part of the burden simply moves from the petrol pump towards the federal budget. When development funds help finance the response, another part can move into spending that no longer happens elsewhere.
Why Motorcycles Tell Us More Than SUVs
The government could have reduced the petrol price for everyone. It didn’t.
Instead, it targeted two- and three-wheelers and restricted eligible cars to engines no larger than 800cc. Someone filling a large SUV does not receive the same protection.
There is an economic logic behind the distinction.
A motorcycle in Karachi often represents basic mobility rather than discretionary consumption. Subsidising the fuel used by a worker commuting across the city is economically different from subsidising the petrol bill of a large SUV.
That does not mean every motorcycle owner is poor. Nor does targeting guarantee perfect delivery.
A vehicle record may not match an applicant’s details. Even a problem with a registered mobile number can interfere with access. Poor connectivity has caused difficulties in some areas as well.
The government has already had to adjust parts of the programme.
Still, its basic structure tells us something.
Pakistan is trying to protect smaller consumers without completely insulating the domestic economy from international energy prices.
The motorcycle subsidy is therefore not a separate welfare story sitting somewhere below the geopolitical headlines. It is one consequence of those headlines.
Islamabad Is Also Trying to Burn Less Fuel
Subsidies are only one side of the government’s response.
On September 17, Pakistan announced austerity measures intended to conserve fuel as the Gulf conflict intensified. The measures included restrictions on fuel use by official vehicles and limits on government vehicle purchases, Reuters reported.
The combination is revealing.
Islamabad is trying to protect selected household consumers while reducing fuel use inside government.
That is not the behaviour of a country facing a theoretical problem. It is the behaviour of a government responding to an energy shock that has already arrived.
Whether these measures save enough fuel or public money is a separate question. Their existence tells us something more immediate about the severity of Pakistan’s exposure.
Hormuz is already influencing domestic policy.
From a Tanker in Hormuz to a Motorcycle in Karachi
Consider the distance between the two ends of this story.
A tanker approaches Hormuz. Its owner considers the danger. The insurer recalculates risk.
Pakistan then needs dollars to pay for energy whose journey has become more difficult and expensive.
Eventually, one morning, a man rides his motorcycle into a Karachi petrol station. He uses a government fuel-relief token because petrol has become painfully expensive.
At first glance, the tanker and the motorcycle have nothing to do with each other.
Economically, they are connected.
I began at a Karachi petrol station because that is where this distant war becomes easier to see.
Pakistan is not fighting Iran. The motorcyclist filling his tank did not create the crisis in Hormuz either. Yet the cost has travelled from a Gulf shipping lane into Pakistan’s budget and, eventually, towards his pocket.
Islamabad can soften that journey with a Rs500 token.
It cannot make the underlying cost disappear.
A complete shutdown of Hormuz would be far worse.
Pakistan does not need one to suffer. The war has already entered our economy without asking permission.