OPEC+ Oil Output Boost Could Offer Crucial Economic Lifeline to Pakistan
OPEC+ is expected to increase oil production by 411,000 barrels per day starting July 2025—a move that may offer timely macroeconomic relief to oil-importing nations like Pakistan. With energy prices already burdening Pakistan’s trade and fiscal outlook, this anticipated output surge could improve the country’s external account, lower inflation, and stabilize its energy sector.
Insiders suggest the hike is part of a broader plan to restore 2.2 million barrels per day to the global oil market by November 2025. Analysts from Ismail Iqbal Securities note this as a strategic push—primarily driven by Saudi Arabia—to reclaim market share while pushing out high-cost producers.
This increase surpasses the previously discussed 137,000 bpd, and a formal decision is expected during OPEC+’s meeting on June 1. If approved, the larger supply may push down global oil prices, creating a ripple effect that benefits countries like Pakistan, which heavily depend on energy imports.
Pakistan annually imports approximately 21 million tonnes of crude oil and petroleum products. During the first ten months of FY25, energy imports alone surged to $12.7 billion—around 26% of the country’s total import bill. With Brent crude averaging $74/bbl, any decline could significantly ease this burden.
According to Insight Securities, if Brent drops to $65/bbl, Pakistan could save as much as $1.8 billion on crude oil and an additional $500 million on RLNG imports, which are tied to international oil benchmarks. These savings would not only reduce the current account deficit but also improve foreign exchange reserves and lessen the urgency for external borrowing.
Fiscally, the government may also benefit. Recent increases in the petroleum development levy (PDL)—Rs18 per litre—aim to support the tariff differential subsidy (TDS) scheme. With a target of Rs100/litre and anticipated 10% growth in fuel demand, lower oil prices could allow the government to hit its revenue goal of Rs2 trillion in FY26—without hiking retail prices.
Lower RLNG costs could also cut electricity generation costs and alleviate circular debt in the power sector. This would improve liquidity for distributors like SNGP and SSGC, allowing timely payments to upstream suppliers such as OGDC and PPL. If global oil prices fall below OGRA’s base assumption of $75/bbl, gas utilities could achieve full cost recovery—boosting their financial health.
Beyond fiscal and energy impacts, investor confidence may also rise. Declining energy costs could stimulate profitability in sectors like textiles, power, and chemicals—potentially lifting the KSE-100 index. However, the outlook is not without risks, particularly with looming budget announcements that may introduce new taxes or provoke resistance to higher petroleum levies.
Still, if oil prices slide as anticipated, the move could deliver a welcome buffer for Pakistan’s economy at a critical time.
