Rising Middle East tensions pose price-rise risk for Pakistan, warns study
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March 13, 2026
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A study by Pakistan Institute of Progress Economics (Pide) researcher Prof Abida Naurin cautioned that rising geopolitical tensions in the Middle
An illustrative image related to: Rising Middle East tensions pose price-rise risk for Pakistan, warns study, highlighting key aspects of the story. | Image source: Geo News (Pakistan)
Rising Middle East tensions pose price-rise risk for Pakistan, warns study
A study by Pakistan Institute of Progress Economics (Pide) researcher Prof Abida Naurin cautioned that rising geopolitical tensions in the Middle East could push global oil prices sharply higher, creating significant risks for Pakistan's price-rise outlook, external accounts, and broader economic stability.
The study underscored Pakistan’s structural vulnerability due to its heavy dependence on imported petroleum and limited strategic reserves, The News documented.
It observed that rising geopolitical risks surrounding the Strait of Hormuz already pushed crude oil prices upward in early 2026. As tensions linked to the US–Israel–Iran dispute intensify, the resulting uncertainty further stated a significant geopolitical risk premium to global energy markets, increasing volatility in oil prices.
Pakistan remains particularly exposed to these developments because petroleum products account for nearly 30% of its total inflows. According to the evaluate, every $10 rise in global oil prices could raise Pakistan’s annual petroleum import cost by approximately $1.8–2.0 billion, while also transmitting inflationary pressures across the market through higher transport, energy, and food costs.
The study warns that in a worst-case situation — such as a three-month disruption in the Strait of Hormuz, global oil prices could surge to between $120 and $150 per barrel. Under such circumstances, Pakistan’s monthly petroleum import cost could rise sharply to between $3.5 and $4.5 billion, while consumer price-rise could climb from around 7% to as high as 15–17%.
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