Karachi: Escalating military tensions in the Middle East, coupled with the closure of the Strait of Hormuz, have raised significant concerns among Pakistani business leaders regarding the nation's trade and economic stability. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has highlighted the severe implications of soaring freight costs and delayed shipments, which could potentially destabilize Pakistan's economy.
According to the Federation of Pakistan Chambers of Commerce and Industry, the recent conflict in Iran, which emerged in late February 2026, has plunged global shipping markets into disarray. The shutdown of commercial vessel traffic through the critical waterway has prompted shipping lines to impose substantial war-risk surcharges. This development has sparked fears of a looming balance of payments crisis for Pakistan.
The FPCCI has urged the government to take immediate action to safeguard the nation's trade and industrial sectors. The geopolitical volatility in the Gulf represents a significant threat to Pakistan's export competitiveness, as approximately 80 percent of the country's crude oil imports and a quarter of its liquefied natural gas transit through the Strait of Hormuz. Any prolonged disruption could deplete foreign exchange reserves and trigger severe inflationary pressures.
The financial impact on logistics has been significant, with container freight rates on major routes witnessing a sharp increase. Shipping lines have also introduced emergency war-risk surcharges, ranging from $1,500 to $3,500 per standard container (TEU). Mr. Sheikh has warned that these logistical challenges could severely impact Pakistan's key export sectors, particularly if transit times to European and U.S. markets increase by 15 to 20 days due to vessel rerouting.
The domestic economy is already feeling the effects of the crisis, with transshipment rollovers and severe delays reported at Karachi's port terminals. Global shipping companies have suspended bookings from Pakistan for Gulf-bound cargo, exacerbating the situation.
Compounding the crisis, Mr. Saquib Fayyaz Magoon, Senior Vice President of FPCCI, noted a recent Rs 55 per liter increase in domestic diesel prices, which has driven inland transportation costs up by an estimated 15 to 25 percent. Industry representatives have expressed concerns over the viability of standard 30-day fixed inland freight contracts, leaving exporters vulnerable to weekly fuel price fluctuations.
The FPCCI leadership has called for the government to develop an emergency contingency plan, including exploring B2B barter trade mechanisms with regional partners and securing alternative fuel supply chains, to mitigate the domestic market's exposure to global economic challenges.
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