Oil Likely to Cross $120 Again: Here’s Why

Global oil rates are at present trading around $118 per barrel, and traders are preparing for a highly volatile $120-rates-in-November scenario as fears of renewed hostilities between the US and Iran grow despite attempts by Pakistan and Gulf parties to support mediate.

Key points

• An armed group again shut a valve on Libya's Hamada-Zawiya pipeline, halting flows to the country's largest refinery, the 120, 000 barrels per day Zawiya plant.
• Japan is due to overtake China as the world's largest LNG importer this year, with 62 million tons of imports compared to China's projected 61 million tons.
• Abu Dhabi's ADNOC has informed clients that its second 1.5 million barrels per day pipeline to Fujairah.
• Despite mediation efforts by Qatar and Pakistan, most signals point towards a resumption of US-Iran hostilities in the coming weeks.
• Egypt purchased six fuel oil cargoes for November-December delivery as soaring LNG costs strain its finances.

Despite mediation efforts by Qatar and Pakistan, most signals point towards a resumption of US-Iran hostilities in the coming weeks. Pakistan-Bound LNG Tanker Hit Near Hormuz by Unknown Attacker. What Is Pushing Oil Towards $120.

For context, the rally comes just days before the US midterm elections. When oil rates entered the danger zone, brent, the global benchmark, was trading above $116 per barrel only last week.

Iran's Islamic Revolutionary Guard Corps (IRGC) remarked three unidentified vessels struck naval mines in the Strait of Hormuz, caught fire, and were abandoned after taking an "unauthorised" route and ignoring Tehran's warnings. The US Central Command (Centcom), like always, denies everything IRGC notes. How Governments and Producers Are Responding.

EU governments will release 42 million barrels of strategic oil and fuel reserves over the next three months, half of it diesel. France, which is releasing 10 million barrels, expects pump rates to fall by €0.12 to €0.18 per litre within days.

Producers in the Gulf are additionally trying to work around the strait. Saudi Aramco has reportedly began offering discounted spot cargoes to European buyers for October and November arrivals, aiming to maximize loadings from its Red Sea coast.

Abu Dhabi's ADNOC has informed clients that its second 1.5 million barrels per day pipeline to Fujairah. It bypasses the Strait of Hormuz, will see first deliveries in early 2027. What This Means for You.

Pakistan now revises fuel rates daily, so movements in global oil costs reach the pump much faster than under the old fortnightly system. A volatile week in international markets could therefore mean frequent changes in what Pakistanis pay for petrol and diesel.

Petrol at present costs Rs. 377.91 per litre. At that rate, a motorist who uses 40 litres a month spends regarding Rs. 15, 116 on fuel. Every Rs. 1 per litre growth adds Rs. While a Rs, 40 to that monthly bill. 10 growth would add Rs. 400.

Notably, the administration has already stepped in once to hold costs steady. In the latest notification, it cut the petroleum levy on petrol from Rs. 80 to Rs. 65.29 per litre and created local refineries absorb a Rs. 14.71 per litre rise in import costs. Whether it can keep cushioning consumers if Brent crosses $120 remains to be seen. Govt Adopts New Formula to Reduce Petrol Rates. Other Developments in Energy Markets.

While granting separate quotas for US-bound cargoes, russia intends to extend its diesel export restrictions through January.

Egypt purchased six fuel oil cargoes for November-December delivery as soaring LNG costs strain its finances. It has already spent 60% of the $10.1 billion it budgeted for LNG imports in 2026/27.

Notably, an armed group again shut a valve on Libya's Hamada-Zawiya pipeline, halting flows to the country's largest refinery, the 120, 000 barrels per day Zawiya plant.

Record freight costs from Europe pushed fuel oil cost spreads in Asia to record highs.

Japan is due to overtake China as the world's largest LNG importer this year, with 62 million tons of imports compared to China's projected 61 million tons. Stay Connected with ProPakistani.

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For now, oil Likely to Cross $120 Again: Here's Why remains the part of the story worth watching, and further updates are likely as more details are confirmed.