Pakistan faces $800m oil shock
- Prime Minister Shehbaz Sharif said on April 29 that Pakistan’s weekly oil import bill has jumped to $800 million as the Iran war disrupts regional energy flows. - The bill was roughly $300 million before the conflict, a 167% surge that Sharif says has knocked back two years of economic recovery. - That shock lands as Pakistan mediates U.S.-Iran talks and fights renewed clashes on the Afghan border.
Pakistan’s problem is simple to describe and brutal to absorb. Oil got much more expensive, very fast, and Pakistan buys a lot of it from abroad. On April 29, Prime Minister Shehbaz Sharif told his cabinet that the country’s weekly oil import bill had jumped to about $800 million from roughly $300 million before the war tied to Iran blew up regional energy routes. He framed it as a direct hit to Pakistan’s recovery — basically, a shock arriving just as the economy had started to look steadier. (dawn.com) ### Why did the bill jump so hard? The core issue is the Strait of Hormuz. A huge share of Gulf oil moves through that narrow waterway, and shipping there has been badly disrupted since the U.S. and Israel launched strikes on Iran on February 28. When that chokepoint seizes up, freight costs rise, insurance rises, crude prices rise, and importers like Pakistan feel it almost immediately. (dawn.com) ### Why is Pakistan so exposed? Pakistan imports much of the fuel it burns, so higher global prices feed straight into its external bill. Sharif said the country had been making macroeconomic progress before the war, but that “our efforts of two years have witnessed a setback.” That matters because Pakistan is still managing debt repayments, fragile reserves, and the poli(dawn.com)ces. (dawn.com) ### Is this just about oil? Not really. Oil is the first-round hit, but the second-round hit is broader. More expensive fuel pushes up transport costs, power costs, and eventually food and industrial costs. Sharif said consultations were under way with provinces on extending fuel subsidies, which tells you the government is already thinking about how to soften the blow be(dawn.com)c anger. (dawn.com) ### So why is Pakistan also trying to mediate? Because the war is not some distant geopolitical drama for Islamabad. Pakistan hosted the first round of direct U.S.-Iran talks in Islamabad on April 11-12, and Sharif told the cabinet that Pakistan kept working to restore peace after that. The logic is pretty clear — if the conflict cools, the energy shock eases, and Pakista(dawn.com)but it is also self-preservation. (dawn.com) ### Did those talks actually matter? They mattered enough that Pakistani officials keep pointing back to them. Sharif linked the April talks to later ceasefire efforts and mentioned Iranian Foreign Minister Abbas Araghchi’s recent visits to Pakistan. Analysts see Pakistan as unusually credible here because it has working relationships with both Washington and Tehran, which is rare. (dawn.com) ### What else is going wrong at the same time? The catch is that Pakistan is not dealing with one crisis. On the Afghan border, Pakistani forces said they destroyed several Afghan Taliban posts and vehicles in the Chaman sector on April 29 as part of Operation Ghazab lil-Haq. So Islamabad is trying to calm one frontier while fighting on another — never a cheap or easy combination. (dawn.com) ### Can Pakistan absorb this? For now, maybe — but not comfortably. Sharif said reserves had held up despite debt payments, helped by support from the UAE and Saudi Arabia. But a weekly oil bill near $800 million is the kind of number that can quickly eat through whatever stability a government thought it had rebuilt. (dawn.com) ### B(dawn.com)800 million weekly oil bill is not just an energy story — it is a growth story, an inflation story, and a political survival story. Pakistan is trying to talk its way out of a regional war because it may not be able to afford the alternative. (dawn.com)
