By Arman Sabir
TradeTrend
Published: Oct 1, 2026
KARACHI, October 1, 2026: Seven months into the Strait of Hormuz crisis, an estimated $330 billion extra fossil-fuel import bill is moving through the global economy, raising costs for households, industry and governments while shifting money across the energy supply chain
The scale is visible in the trade data. In the European Union, the value of petroleum-oil imports jumped 55.8% in the second quarter of 2026 while import volumes were almost unchanged, rising just 1.2% from the 2025 monthly average. Across the wider oil market, global observed inventories fell by 507 million barrels between February and August, according to the OECD's September assessment citing IEA data.
The shock is also moving through competing energy markets. Asian spot LNG prices averaged 45% higher year-on-year from March to June, while European prices were 32% higher, as flexible cargoes shifted towards Asian buyers amid tighter supply and higher transport costs.
Who Is Carrying the Energy Shock?
The additional energy bill is already falling unevenly across countries. CREA estimates that fossil-fuel importers paid more than $330 billion above pre-war expectations between March and August 2026. Its estimates put the net additional cost for the European Union at $54 billion and East Asia at $49 billion, while the Middle East recorded $61.2 billion in additional export earnings.
The pressure is reaching households as well as national accounts. The OECD says households in several G20 economies are devoting a higher share of their spending to fuel as gasoline and diesel prices rise, while higher refining margins are adding to consumer and business costs. Its September energy-support tracker records more than 240 government energy-support measures across 49 economies.
The IMF describes the effect from the perspective of energy-importing economies: higher energy prices transfer income towards fossil-fuel exporters, reduce real household incomes and raise production costs.
Governments have responded with fuel subsidies, tax measures and other forms of price support. The OECD says such measures have helped cushion households and firms, while inventories, alternative supplies, fuel switching and reduced consumption have also absorbed part of the shock.
Net Financial Shift ($ Billions)
Regional LNG Price Growth (%)
The producers' side presents another account. OPEC+ has framed its production decisions around market stability, while OPEC has stressed the need for continued investment in oil production and energy security. In September, the seven OPEC+ countries maintained their programme of production adjustments while reaffirming their commitment to market stability.
For importing countries, the immediate issue is the size of the bill and how much of it reaches households and businesses. For producers, the question is the stability of supply, investment and the functioning of the oil market. Between the two lies a much larger chain of refiners, traders, shipping companies, insurers and distributors.
When the Shock Reaches Asia
Asia is more exposed to the energy shock because oil and gas account for about 4% of the region's GDP, almost twice Europe's share, while Malaysia and Thailand exceed 10%, according to the IMF. The International Energy Agency says Asian spot LNG prices averaged $17.5 per MMBtu from March to June, 45% higher than a year earlier, while higher prices have encouraged fuel switching and reduced operating rates in gas-intensive industries.
Oxford Economics has warned that an LNG supply disruption presents a greater risk to Asian economies than the oil-price shock alone because countries heavily dependent on gas-fired electricity may have to buy expensive spot cargoes, reduce electricity supply or switch fuels.
The Centre for Strategic and International Studies has separately documented the effect on Pakistan, where more than 90% of imported LNG has traditionally come from Qatar. Pakistan's LNG generation fell to around 4–6% of the power mix in March and April, compared with a five-year average of about 20%, while coal use rose to around 30%. CSIS says planned blackouts affected manufacturing, businesses and households, while Pakistan purchased spot cargoes at prices above $20 per MMBtu.
Pakistan therefore provides a real-time case study of how a global supply chokepoint moves through an emerging economy. The transmission is not limited to the international import bill: it reaches electricity generation, fuel procurement, industrial production, government support and household energy choices.
Pakistan's importers describe the adjustment from inside the supply chain. Pakistan State Oil says its nationwide fuel supply remained uninterrupted during FY2026 and that its base business absorbed a PKR 10.7 billion swing in LNG costs. The company reported PKR 99.9 billion in gross profit for the year, but that figure is not net earnings. PSO separately reports finance costs and continues to carry large receivables associated with the country's circular-debt problem; its standalone profit after tax for FY2026 was PKR 15.07 billion.
The government has also relied on changes in the power mix. The Power Division said in September that RLNG spot cargoes were costing $23–25 per MMBtu and that greater use of domestic gas helped avoid an additional PKR 10.6 billion burden on consumers and another hour of load-shedding.
For households, the impact is visible in interrupted gas supply, higher bills and the cost of finding alternatives. Consumer groups have raised concerns about petroleum-price increases feeding into transport, agriculture, industry and essential goods, while households facing gas shortages have increasingly turned to LPG and other alternatives.
The winter question is now larger than whether Europe can secure enough gas. Asian buyers competing for LNG cargoes are entering the same market, while Pakistan has fewer options when imported gas becomes expensive or unavailable.
Who Captures the Additional Energy Money?
The additional energy bill does not move directly from consumers to oil producers. Between the crude producer and the final buyer are refiners, traders, shipping companies, insurers and distributors, each operating under different market conditions.
The International Energy Agency reports that the disruption has widened the gap between crude and refined-product prices. Diesel prices rose faster than crude, while Atlantic Basin refining margins reached record levels in August. The IEA says refineries in other regions increased throughput as markets adjusted to tighter supplies, with some operators able to capture unusually wide spreads between refined-product prices and crude input costs.
These refining margins, commonly described through crack spreads, are not the same as company profit. They indicate the market spread between crude inputs and refined products before other operating, financing and business costs are taken into account. At the same time, the IEA reports that surging freight rates weighed on Singapore refining profitability, showing that higher margins in one part of the chain can be partly offset by higher transport costs elsewhere.
Shipping costs have also become part of the energy bill. The International Chamber of Shipping says the disruption has placed seafarers and commercial vessels in danger and hindered vital energy routes. It has called for the Strait of Hormuz to return to unimpeded navigation and opposed tolls or other clearance charges on vessels.
BIMCO, representing shipowners and operators, says owners have faced substantially higher insurance costs and uncertainty over whether adequate cover is available for voyages through the Gulf. It also identifies additional war-risk premiums, deviation, delay and off-hire costs as issues requiring clearer allocation between shipowners and charterers.
The producer side presents a different financial picture. Saudi Aramco reported $67.2 billion in adjusted net income and $21.9 billion in free cash flow excluding working-capital effects for the first half of 2026, alongside hydrocarbon production of 11 million barrels of oil equivalent per day. Its integrated model covers both upstream production and downstream operations.
| Tier | Primary Margin Driver | Key Market Signal |
|---|---|---|
| Upstream Exporters | Elevated crude benchmark prices | Saudi Aramco H1 free cash flow at $21.9B |
| Refiners & Traders | Record "crack spreads" (distillate margins) | Diesel prices outpaced crude input costs |
| Logistics & Insurers | War-risk premiums & rerouting costs | Strait of Hormuz friction elevated charter rates |
| Local Grids & Retail | Grid system losses & import markups | RLNG spot prices ($23–25/MMBtu) passed to end users |
OPEC presents the wider producer position through the question of market stability and future investment. OPEC+ said in September that its participating countries would maintain their October production levels while reaffirming their commitment to market stability. OPEC has also stressed the need for adequate and timely investment to maintain energy security and the stability of oil markets.
The available record therefore points to several different destinations for the additional money: higher producer revenues where export prices and volumes permit, wider refining spreads where product shortages allow, and higher shipping, insurance and logistics charges where the cost of moving energy through disrupted routes increases.
The question is how the additional payment is divided among producers, refiners, traders, shipowners, insurers and governments—and how much ultimately reaches the household and business that pays the final energy bill.
What the Energy Bill Leaves Behind
The same energy shock is producing very different policy responses depending on a country's fiscal capacity, energy dependence and ability to substitute domestic supplies for imports. A wealthy economy can draw on strategic reserves, subsidise consumers or finance alternative infrastructure, while an import-dependent developing economy may have to divert public money simply to prevent transport and electricity costs from rising further.
Pakistan has taken a targeted approach. The Economic Coordination Committee approved a fuel-relief scheme providing PKR 500 a week for eligible two- and three-wheelers and PKR 1,000 for eligible cars up to 800cc. The government allocated PKR 75 billion for the programme.
Europe faces a different pressure as winter approaches. The European Commission says gas storage levels remain below historical levels, while supply is currently stable and protected customers, particularly households and essential services, remain covered under EU gas-security rules. The Commission is due to publish its Winter Preparedness Report on October 8.
The policy difference reflects the structure of the underlying energy systems. Pakistan is trying to limit the immediate effect of imported fuel costs on transport users while using domestic gas where possible to reduce pressure on electricity consumers. Europe is preparing for a winter in which gas storage, LNG competition and heating demand could determine how much of the shock reaches households and industry.
The longer-term financial question is larger than emergency relief. The OECD says renewed energy disruptions could erode household purchasing power, keep inflation elevated and weaken growth, while higher long-term borrowing costs are increasing fiscal pressure on governments.
For energy-importing economies, the adjustment can take several forms at once: a larger import bill, reduced household purchasing power, pressure on government finances, higher production costs and greater demand for domestic or alternative energy. For exporters, higher prices can increase revenues while disruption can also reduce volumes reaching international markets.
The OECD's assessment of the shock points to continuing pressure on household purchasing power, inflation and economic growth as governments manage the consequences of higher energy costs. Governments, producers and energy companies are therefore responding to the same disruption through very different financial and policy mechanisms.
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