Pakistan's Economic Recovery Threatened by US-Iran Conflict, Warns PM Shehbaz Sharif

Prime Minister Shehbaz Sharif has raised alarms about the detrimental effects of the ongoing US-Iran conflict on Pakistan's fragile economic recovery. With oil prices soaring, the country's import bill is nearing $800 million, threatening the progress made in recent years. Sharif emphasized the need for collective efforts to address these challenges and provided updates on diplomatic negotiations aimed at easing regional tensions. He expressed hope for a resolution soon, as Pakistan prepares to host further talks between the US and Iran. This article delves into the implications of the conflict on Pakistan's economy and the government's proactive measures to stabilize the situation.

By Narendra Chaudhary Apr 30, 2026, 10:36 IST

Economic Implications of the US-Iran War

On Wednesday, Prime Minister Shehbaz Sharif expressed concerns that the ongoing conflict between the US and Iran is significantly undermining Pakistan's delicate economic recovery. He highlighted that escalating oil prices have driven the country's import expenses close to $800 million. During a Cabinet meeting, Sharif remarked that the conflict has negated crucial progress achieved over the last two years, even as Islamabad intensifies its diplomatic initiatives to alleviate tensions in the West Asian region. He pointed out that while rising energy costs are putting pressure on the economy, a recent decline in domestic fuel consumption provides only minimal relief. According to an official statement, a task force is actively monitoring the situation on a daily basis. Sharif emphasized the necessity for collective action to address these challenges. He updated the Cabinet on the developments in the US-Iran negotiations and Pakistan's role in fostering regional stability, noting that extensive discussions between Iran and the US took place in Islamabad on April 11, lasting 21 hours and marking a notable diplomatic achievement.

Sharif's Insights on the Iran-US Ceasefire

Sharif stated that Pakistan has made earnest and coordinated efforts to ensure the success of the negotiations, with significant contributions from Field Marshal Asim Munir, Deputy Prime Minister and Foreign Minister Ishaq Dar, along with other senior officials. He noted that these efforts have led to the extension of the ceasefire between Iran and the United States, which remains in effect. The Prime Minister informed the Cabinet that Iranian Foreign Minister Abbas Araghchi visited Pakistan with his delegation and engaged in several rounds of discussions, including a two-hour meeting with him. He mentioned that Araghchi assured him of a positive response following consultations with Iran's leadership. "Before the Iranian foreign minister's visit to Russia, I spoke with him on the phone, where he confirmed that all his meetings in Oman were conducted with genuine intent, and after discussions with his leadership, he will provide a positive response soon," Sharif said, referring to Araghchi's recent visits to Islamabad, Muscat, and Moscow over the weekend. He expressed optimism that the conflict would soon come to an end. Pakistan is set to facilitate a second round of discussions between the United States and Iran. The Iranian minister made two brief visits to Pakistan within 48 hours over the weekend, meeting with Field Marshal Munir and PM Shehbaz to deliberate on the regional situation. Last week, Trump extended the two-week ceasefire with Iran indefinitely to allow Tehran additional time to formulate a unified proposal to conclude the war.