As the conflict expands, global crude benchmarks are surging, directly inflating Pakistan’s petroleum import costs. This comes at a precarious time, with the economy just beginning to steady after prolonged instability.

A drawn-out war could trigger cascading effects: disrupted remittances from Gulf states, weakened export demand amid trade slumps, and an exploding import bill. July-February exports have already dropped 8%, and further declines loom large.

According to reports from Dawn in Karachi, the fallout extends beyond energy. Any slowdown in Gulf economies—key sources of over 50% of remittances—could deliver a body blow to Pakistan’s balance of payments.

The specter of a widening current account deficit evokes memories of 2022, when soaring global prices pushed the nation to the brink, necessitating IMF intervention. Today, similar dynamics threaten to reverse hard-won gains.

On the ground, consumers brace for pain. Elevated oil prices mean steeper petrol pumps, pricier electricity, and costlier transport, igniting broad-based inflation. Lower and middle-class households, yet to recover from prior shocks, stand to suffer most.

Logistics chains will bear the brunt, passing on higher costs to goods and services nationwide. Should prices hit Ukraine-war levels, hyperinflationary spirals could ensue, eroding purchasing power and fueling social unrest.

With reserves thin and options limited, Pakistan must navigate this storm wisely, perhaps accelerating energy diversification and fiscal reforms to shield against future vulnerabilities.