Karachi: Amid ongoing regional turmoil, Brent oil prices have surged nearly 70% over the past month, with a 25% increase recorded on a single day, March 9, 2026. This significant spike is expected to impact petroleum imports adversely and may trigger a policy shift in Pakistan, encouraging oil and gas exploration companies to boost their production to meet a larger share of local demand, currently at roughly 15%.

According to JS Global, Pakistan's domestic crude and gas production has declined by 16% and 21%, respectively, over the last five years. The decline has been attributed to several factors, including cashflow constraints due to circular debt accumulation, a focus on safer drilling over frontier exploration, and forced curtailment in recent quarters to consume take-or-pay contracted RLNG. The current increase in oil prices is driven by supply chain disruptions, including a halt at the Strait of Hormuz and reduced production from large-scale global refineries facing logistical constraints.

This situation presents an opportunity for domestic exploration companies to restore previously curtailed production and bring new fields online. Immediate restoration of production could occur, but the expansion of new fields would require government assurances that production would not be curtailed once the situation normalizes. Companies are currently limited by a cap on third-party gas sales, restricted to 100 mmcfd annually.

JS Global reports that companies like OGDC, PPL, MARI, and POL have experienced forced curtailment impacts. If production returns to normal levels, potential earnings impacts are estimated at Rs3.90/share for OGDC, Rs3.46/share for PPL, Rs5.88/share for MARI, and Rs5.68/share for POL. The analysis assumes a base oil price of US$65 per barrel, providing a framework for understanding the financial implications of restored production levels.