ISLAMABAD: Pakistan’s economy is facing growing pressure as tensions in the Middle East disrupt oil shipments through the strategic Strait of Hormuz, a key maritime route through which the country imports the majority of its crude oil.
According to a report published by The New York Times and cited by The News International, Pakistan imports more than 85 percent of its crude oil from Saudi Arabia and the United Arab Emirates via the strait, making the country highly vulnerable to supply disruptions.
The escalating regional conflict has slowed tanker traffic and disrupted fuel deliveries, forcing several vessels to remain docked at Karachi port, the country’s main economic hub.
Fuel price hike adds pressure
Amid supply concerns, the government increased fuel prices by 20 percent on March 6 in an attempt to discourage hoarding and manage limited supplies.
Economist Kaiser Bengali warned that prolonged disruption could severely damage Pakistan’s already fragile economy.
“Pakistan is already bankrupt and surviving loan by loan,” he said, referring to financial assistance from the International Monetary Fund. “Any prolonged disruption could topple its economy.”
Farmers and labourers hit hardest
Rising energy costs have particularly affected Pakistan’s agricultural sector, which contributes over 23 percent of the country’s GDP and employs nearly 37 percent of the labour force.
Farmers preparing for the spring harvest say the surge in diesel prices has increased operational costs for tractors and other agricultural machinery.
Aamer Hayat Bhandara, a farmer from Pakpattan district in Punjab, said diesel-powered equipment is essential during cultivation and harvesting, making the sector highly dependent on fuel prices.
Urban workers have also been affected. Muhammad Roshan, a rickshaw driver in Rawalpindi, said rising fuel costs were making it difficult to sustain daily income.
Social impact before Eid
The crisis is also affecting daily life ahead of Eid ul Fitr. Many families are cancelling travel plans to their hometowns due to rising transport costs.
With nearly half of Pakistan’s 250 million population living in poverty, according to the World Bank, the shift of some schools to online classes has also raised concerns about access to digital devices and reliable internet.
Government exploring alternatives
Pakistan is exploring alternative supply routes and domestic solutions to mitigate the crisis. Officials have asked Saudi Arabia to consider shipping oil via its Red Sea ports as an alternative route.
Authorities are also considering energy-saving measures such as encouraging online classes, reducing official travel, and possibly shortening the workweek.
However, economists warn that such measures could disproportionately affect working- and middle-class citizens who rely on daily wages.
Meanwhile, retailers say consumer spending has already declined during the usually busy Ramadan shopping season.
“There is no such rush in the markets,” said Shabbir Ahmed, a clothing trader in Karachi, adding that customers are prioritising essential purchases.