Middle East war impact on Pakistan trade deepens
The Middle East war impact on Pakistan trade is emerging as a serious economic challenge, with exports and vital imports facing disruption due to suspended flights and shipping operations. As fighting escalated after attacks on Iran by Israel and the United States, transport links across the region were abruptly halted, directly affecting Pakistan’s trade flows and overseas workforce.
Business leaders say the situation has created uncertainty for exporters who rely heavily on Middle Eastern markets. At the same time, essential imports such as oil and liquefied natural gas are exposed to delays, raising concerns about supply stability and future prices.
Flights suspended, Pakistanis stranded abroad
One of the most immediate effects of the Middle East war impact on Pakistan trade is the suspension of air travel. Thousands of Pakistanis are currently stranded across the region, including a large number in Saudi Arabia for Umrah. With airports closed and airspace restrictions in place, families and travel operators are struggling to make alternative arrangements.
Millions of Pakistani workers live in the Middle East and send money home regularly. Prolonged instability could affect their sense of security and their ability to travel or work normally, adding to the broader economic strain.
Exports to key markets come to a halt
The Middle East war impact on Pakistan trade is particularly worrying for exporters. The region is one of Pakistan’s most important trading destinations, especially the United Arab Emirates, which is Pakistan’s second-largest trading partner. In FY25, total trade with the UAE reached $10.1 billion, while Pakistan’s exports stood at $2.1 billion.
Trade with Saudi Arabia is also significant. Pakistan exported around $700 million worth of goods to the kingdom in FY25, while imports from Saudi Arabia in 2024 were valued at $4.5 billion. With logistics disrupted, exporters fear delayed shipments, canceled orders, and financial losses.
Oil, LNG, and the Strait of Hormuz risk
Pakistan’s dependence on Middle Eastern energy supplies adds another layer to the Middle East war impact on Pakistan trade. The country imports most of its oil from the region and relies on LNG shipments from Qatar. Any prolonged disruption could increase costs and pressure domestic energy markets.
Earlier warnings from Iran about the possible closure of the Strait of Hormuz have heightened fears. If shipping through this vital route is blocked, global oil supply would face a shock, affecting both importing and oil-producing economies.
ALSO READ: Pakistan Petroleum Limited Earnings Slip in 2QFY26
Remittances and currency market concerns
The Middle East war impact on Pakistan trade is also visible in currency markets. Pakistan relies heavily on remittances from overseas workers to support foreign exchange reserves, which reached $40 billion in FY25. Any slowdown in remittance inflows could weaken reserves and affect economic stability.
Malik Bostan, Chairman of the Exchange Companies Association of Pakistan, noted that demand for currencies such as the Saudi riyal and UAE dirham has declined in the immediate aftermath of the conflict. He explained that while remittance channels remain open, seasonal inflows linked to Ramadan and Eid travel may decrease.
Export ambitions face a major setback
Pakistan’s export sector was already struggling before the conflict, despite government plans to raise exports to $60 billion within three years. The Middle East war impact on Pakistan trade now threatens to derail these ambitions. With one year already gone, exporters say the conflict could significantly weaken overall performance if it drags on.
Economists warn that prolonged instability in the region would affect trade volumes, remittances, energy costs, and investor confidence. For Pakistan, the conflict highlights how deeply its economy is tied to the Middle East and why regional peace remains critical for economic stability.
