Introduction:
The escalation in the United States (US)–Iran conflict has now entered a fragile ceasefire phase following intense military confrontation and disruption of global energy routes. A temporary, Pakistan-mediated ceasefire agreed in early April 2026 led to the partial reopening of the Strait of Hormuz; however, the truce remains highly unstable, with continued naval blockades, mine threats, and intermittent disruptions to shipping flows.[1]
This conflict represents a profound geopolitical shock with far-reaching economic consequences, particularly for energy-importing and structurally vulnerable economies such as Pakistan. The evolving crisis marked by disruptions in the Strait of Hormuz, volatility in global oil and gas markets, and regional instability has transformed into a systemic economic stressors for Pakistan rather than a localized external shock. The Strait of Hormuz, through which nearly 20% of global oil and gas flows, has emerged as the central checkpoint in the crisis, amplifying supply disruptions and price volatility.[2]
