Pakistan's economy faces mounting pressure as the US-Iran conflict triggers a severe energy price shock, with the country's weekly petroleum import bill surging 167% from $300 million to $800 million. According to reports from India Narrative, this represents an annual additional burden of around $26 billion, a figure that nearly matches Pakistan's entire FY2025 merchandise export earnings of $29.8 billion. Prime Minister Shehbaz Sharif confirmed in April 2026 that the weekly petroleum import bill had risen from $300 million to $800 million, creating what economists term a structural stress event of proportions that expose vulnerabilities predating the current crisis.
The surge in oil import costs stems from the benchmark Brent crude surpassing $112 per barrel with the closure of the Strait of Hormuz driving freight costs and insurance premiums to historic highs. As reported by India Narrative, Pakistan imports 85-90% of its petroleum requirements through imports, predominantly from Gulf states whose export logistics depend entirely on unimpeded Hormuz transit. The country has no comparable alternative supply option and no functioning strategic petroleum reserve, creating a high pass-through environment where international oil price increases transmit rapidly into domestic fuel prices, transport costs, electricity tariffs, and consumer prices.
The energy shock transmits across Pakistan's macroeconomy, leading to accelerating inflation, current account deterioration, foreign exchange reserve depletion, currency depreciation, and a growing logistics crisis at Karachi port. According to the report, Pakistan is the primary casualty in the subcontinent of the US-Iran war, with the IMF estimating Pakistan's CPI elasticity to oil at 0.4-0.6% per 10% price increase — among the highest in South Asia. The country's vulnerability stems from its structural dependence on imported petroleum, making it highly susceptible to global price fluctuations and supply disruptions.
