Pakistan's reliance on smuggled Iranian fuel has quietly shifted, with industry sources reporting a dramatic slowdown in the illegal trade. The change follows the destruction of at least six oil tankers in Balochistan over the past 45 days, a development that has reshaped the country's energy landscape during a period of regional turmoil. Main Developments Oil sector insiders claim the influx of Iranian petroleum products has dropped by at least 60 percent. The decline is attributed to terrorist attacks on tankers coming from Iran, though the exact number of destroyed vehicles remains unconfirmed by independent sources. Before the slowdown, smuggled fuel was widely available across Balochistan, Sindh, and even reached Karachi. Many in trade circles believe Punjab also benefited from these supplies, which helped Pakistan avoid the rationing seen in neighbouring India, Bangladesh, and Sri Lanka. Read also: EU AI Act enforcement begins with hefty fines, new powers The reduction in smuggling comes as Pakistan's official import bill for petroleum products hit a record $16.86 billion in FY26, representing roughly 22 percent of total imports. This figure compares with $15.94 billion in FY25, according to the Pakistan Bureau of Statistics. Background The surge in Iranian oil smuggling began after the US-Israeli attack on Iran on Feb 28, which pushed crude prices above $100 per barrel. The conflict also triggered the closure of the Strait of Hormuz, the world's most critical energy chokepoint, which carries about 20 percent of global oil, 20 percent of LNG, and one-third of fertiliser trade. Pakistan's illegal trade with Iran is estimated to be worth over $2 billion annually. Beyond fuel, products such as edible oil, food items, washing powder, and soaps are readily available in Karachi's markets, reflecting the deep entrenchment of cross-border commerce. Why It Matters Pakistan's energy security has long depended on this grey-market supply, particularly during crises. With smuggling now curtailed, the country's buffer against shortages has shrunk, even though existing reserves for 25 days remain available and additional ships arrived during the war. Trade and industry circles widely believe authorities deliberately ignored the smuggling to prevent a crisis during the conflict. The government has consistently passed price increases to consumers but has avoided a shortage-like situation—a balance that may be harder to maintain with reduced illicit inflows. What's Next The sustainability of this 60 percent reduction remains unclear, as sources acknowledge difficulty in determining precise proportions of previous and current influxes. Whether the decline is a temporary wartime phenomenon or a lasting shift will depend on security conditions in Balochistan and the resolution of the broader regional conflict. Pakistan's continued dependence on imported fuel, which historically consumes 22-25 percent of its import bill, means any prolonged disruption to either legal or illegal supply chains could heighten pressure on consumers and the economy.