IF THE war between Iran and the United States escalates, the single biggest economic threat to Pakistan will come in the shape of oil.
Brent crude settled around $72.5 a barrel on Friday, already up nearly 19 per cent year-to-date, according to CNBC. Rumours are swirling of oil touching $100. For Pakistan, even modest increases carry heavy consequences.
For every $10 rise in oil prices, the current account deficit increases by roughly $1.5-$2 billion, explains former chief executive officer of the Pakistan Business Council, Ehsan Malik.
“If prices were to climb to $100, the deficit could expand by $5-$7bn on an annualised basis, potentially undoing recent gains that allowed FY25 to post a $2bn current account surplus.”
For a country already ravaged by rising inflation, risks to oil supplies will weigh heavily, especially during Ramazan
