US-Iran war has had a profound impact on Pakistan’s economy, with oil import bill rising 167 percent.

Desk. The ongoing conflict between the US and Iran has caused a massive surge in energy prices in Pakistan’s economy. Pakistan is already in dire straits due to rising inflation, dwindling foreign exchange reserves, and a rapidly depreciating currency. According to an article in India Narrative, this setback is not merely temporary but a structural blow to the economy. The article states that Pakistan is the primary victim of the US-Iran war in the subcontinent.

Pakistan’s weekly petroleum import bill has risen from $300 million to $800 million, a 167% increase. Benchmark Brent crude has surpassed $112 per barrel. The closure of the Strait of Hormuz has pushed freight costs and insurance premiums to record highs. This energy shock is rippling through Pakistan’s macroeconomy, leading to rising inflation, a current account deficit, depleted foreign exchange reserves, and a devalued currency. Logistics crunch is also growing at Karachi port.

In April 2026, Prime Minister Shahbaz Sharif publicly confirmed that Pakistan’s weekly petroleum import bill had risen from $300 million to $800 million. This is a 167% increase. This would result in an additional burden of approximately $26 billion annually. This figure is approximately equal to Pakistan’s total merchandise export revenue of $29.8 billion for the fiscal year 2024-25. The country is generating an import liability equivalent to its entire export sector in a single commodity category, at a time of severe stockpiles.

The article states, “Pakistan’s annual oil burden now approaches its total export earnings. This is not merely a price adjustment—it is a stress event of structural proportions, exposing vulnerabilities that existed decades before the current crisis.” Pakistan’s petroleum needs are met by imports, 85 to 90 percent of which come primarily from Gulf countries, whose export logistics depend entirely on the unobstructed Strait of Hormuz. The country has no comparable alternative supply options or functioning strategic petroleum reserves.

This structural dependence creates a high pass-through environment. This means that increases in international oil prices are rapidly and widely transmitted to domestic fuel prices, transportation costs, electricity tariffs, and consumer prices.