Karachi: Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum and Chairman of several key economic bodies, has raised significant concerns about the ongoing US-Israel-Iran conflict and its impact on the global energy supply chain. He cautioned that the situation is steering the world toward a potential economic crisis.
According to Pakistan Businessmen and Intellectuals Forum, the conflict, which began on February 28, has drastically altered the geopolitical landscape, placing energy-dependent nations such as Pakistan at risk. The closure of the Strait of Hormuz on March 4 has disrupted nearly 20 percent of global oil and liquefied natural gas trade, marking the most severe supply interruption since the 1970s.
Mian Zahid Hussain highlighted that Brent crude oil prices, which recently exceeded $120 per barrel, remain unstable despite some relief following diplomatic efforts by President Trump. The blockade has led to a significant reduction in oil production by major exporters such as Saudi Arabia, Kuwait, and the UAE, posing serious challenges to global energy and food security, as noted by the International Energy Agency.
He warned that prolonged conflict could severely impact economies like Qatar and Kuwait, potentially reducing their GDP by up to 14 percent. This downturn could affect millions of Pakistani expatriates and the $21 billion remittances from the Gulf Cooperation Council countries that support Pakistan's financial stability.
Discussing diplomatic efforts, Mian Zahid Hussain noted President Trump's recent announcement of "productive talks" and the delay in military strikes on Iran as temporary relief for global markets. However, he stressed that the situation remains precarious, with Iran denying formal negotiations and seeking compensation for infrastructure damage.
The threat of sea mines, increased insurance and freight charges, and declarations of force majeure by companies like QatarEnergy have raised fertilizer and gas prices significantly, threatening agricultural output and food security worldwide.
Domestically, Mian Zahid Hussain pointed to a sharp rise in fuel and grocery prices in Pakistan, prompting emergency measures such as a reduced workweek and school closures to conserve energy. He called for diversification of energy sources and increased diplomatic efforts to protect Pakistani workers in the Gulf, whose safety and economic contributions are increasingly uncertain amidst the ongoing conflict.
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