our efforts made in the last two years have gone down
Caught between the fires of a war it did not start, Pakistan finds itself paying an enormous price — its monthly oil import bill nearly tripling to $800 million — as the US-Iran conflict unravels two years of hard-won economic recovery. Prime Minister Shehbaz Sharif has spoken with rare candor about the helplessness of smaller nations when great powers collide, even as Islamabad quietly positions itself as one of the few bridges still standing between Washington and Tehran. In hosting marathon peace talks and preparing for a second round of negotiations, Pakistan is wagering that diplomacy may be the only instrument capable of healing both a regional wound and its own economy.
- Pakistan's monthly oil bill has surged from $300 million to $800 million almost overnight, erasing the economic momentum Islamabad had carefully built over two years.
- Prime Minister Sharif admitted to his cabinet that the country has little power over the forces reshaping its finances, even as a daily task force scrambles to contain the damage.
- The conflict — ignited on February 28 when the US and Israel struck Iran, killing Supreme Leader Khamenei — has destabilized Gulf shipping lanes and sent shockwaves through every import-dependent economy in the region.
- Pakistan brokered a 21-hour marathon session between US and Iranian officials in Islamabad, producing an indefinitely extended ceasefire and elevating Islamabad to a rare mediating role.
- Iranian Foreign Minister Araghchi made two visits to Pakistan within 48 hours, signaling Tehran's engagement, while Trump indicated openness to direct phone diplomacy — pointing toward a fragile but real path forward.
- A second round of US-Iran talks is being planned on Pakistani soil, with the outcome carrying consequences that stretch far beyond the Gulf — and directly into Pakistan's own economic survival.
Pakistan's two-year economic recovery has been abruptly derailed by the US-Iran war, with the country's monthly oil import bill nearly tripling to $800 million. Prime Minister Shehbaz Sharif laid out the damage at a cabinet meeting, acknowledging that the gains of recent years had been effectively wiped out by a conflict Islamabad had no hand in starting. Consumption has dipped slightly as the country tightens its belt, and a task force now monitors the situation daily.
The war began on February 28, when the United States and Israel jointly struck Iran, killing Supreme Leader Ali Khamenei and senior military commanders. Iran's retaliation spread the fighting across the Gulf, disrupting trade routes and forcing countries like Pakistan to absorb the economic fallout of a conflict far beyond their borders.
Yet Pakistan has also carved out an unlikely diplomatic role. On April 11, Islamabad hosted a grueling 21-hour session between US and Iranian officials — a breakthrough that produced an indefinitely extended ceasefire. Field Marshal Asim Munir and Deputy Prime Minister Ishaq Dar worked behind the scenes to keep both delegations engaged, while Iran was given time to formulate a unified peace proposal.
Iranian Foreign Minister Araghchi visited Pakistan twice within 48 hours, meeting with both Munir and Sharif and signaling that Tehran would deliver a positive response after consulting its leadership. He also traveled to Muscat and Moscow, reflecting a broader Iranian diplomatic push. President Trump, for his part, indicated openness to phone talks with Iranian officials and had already extended the original ceasefire indefinitely.
A second round of direct negotiations is now being planned in Pakistan. For Sharif's government, the stakes are existential in both directions: a successful deal could restore regional stability and ease the oil prices strangling the economy, while failure risks a deeper conflict whose consequences would reach far beyond the Gulf.
Pakistan's economy, which had been steadily recovering over the past two years, has been dealt a sharp blow by the escalating conflict between the United States and Iran. Prime Minister Shehbaz Sharif laid out the damage plainly during a cabinet meeting: the country's monthly oil import bill has nearly tripled, climbing from $300 million before the war to $800 million in recent weeks. The surge reflects not just the direct cost of crude on global markets, but the broader economic shock of a regional conflict that threatens shipping lanes, disrupts trade, and forces countries like Pakistan to scramble for alternatives.
Sharif acknowledged the frustration candidly. "Allah Almighty had placed our economy on a macro level, and we were growing in numbers, but as a result of this sudden war, our efforts made in the last two years have gone down," he told his cabinet. "You and I have no say in this." The prime minister noted that consumption had actually dropped slightly in the current week compared to the previous one—a sign that Pakistan is already tightening its belt in response to the shock. A task force has been assembled to monitor the situation daily, and officials are calling for collective action to manage the crisis.
Yet even as Pakistan absorbs this economic punishment, Sharif has positioned the country as a crucial mediator in the conflict itself. On April 11, Islamabad hosted a marathon 21-hour round of talks between Iranian and American officials—a significant diplomatic breakthrough that resulted in an extended ceasefire. The effort involved Field Marshal Asim Munir and Deputy Prime Minister Ishaq Dar, among other senior officials, working behind the scenes to keep both sides at the table. The ceasefire, which was originally set for two weeks, has now been extended indefinitely, giving Iran time to prepare a unified proposal to end the war.
The conflict itself began on February 28, when the United States and Israel jointly attacked Iran, killing Supreme Leader Ali Khamenei and several top military commanders. Iran's retaliation then spread the fighting across the Gulf region, destabilizing an already fragile part of the world. In the weeks since, Pakistan has emerged as one of the few countries with channels to both sides—a position that carries both opportunity and risk.
Iranian Foreign Minister Abbas Araghchi visited Pakistan twice within 48 hours over the weekend, meeting with both Munir and Sharif to discuss the regional situation. During their conversations, Araghchi indicated that after consulting with Iran's leadership, he would deliver a positive response to ongoing negotiations. He had also traveled to Muscat and Moscow, signaling that Iran is engaged in a broader diplomatic push. Meanwhile, U.S. President Donald Trump indicated on Sunday that American and Iranian officials could conduct phone talks to explore a peaceful settlement, and he had already extended the original two-week ceasefire indefinitely the week before.
Pakistan is now preparing to host a second round of direct talks between the two sides. The stakes are high: a successful negotiation could restore regional stability and eventually bring down the oil prices that are currently strangling Pakistan's economy. But failure could mean an even deeper conflict, with consequences that would ripple far beyond the Gulf. For now, Sharif and his team are betting that Pakistan's geographic position and diplomatic relationships give it the leverage to broker a deal—and that doing so might be the only way to reverse the economic damage already done.
Notable Quotes
If a week ago our bill was $300 million, today it has reached $800 million— Prime Minister Shehbaz Sharif
Allah Almighty had placed our economy on a macro level, and we were growing in numbers, but as a result of this sudden war, our efforts made in the last two years have gone down— Prime Minister Shehbaz Sharif
The Hearth Conversation Another angle on the story
Why did Pakistan's oil bill triple so suddenly? Is it just the price of crude going up?
It's partly that, but it's bigger. When the US and Iran went to war in late February, shipping through the Gulf became dangerous. Insurance costs spike, refineries get nervous, supply chains break. Pakistan doesn't produce much oil—it imports almost everything—so when global prices jump and routes get risky, the bill explodes. The $300 million to $800 million jump happened in weeks.
Sharif said Pakistan had been growing for two years. How much damage does an $500 million monthly hit actually do?
It's catastrophic for a country already managing debt and inflation. That's not a one-time cost—it's recurring, every month. It eats into foreign reserves, forces cuts elsewhere in the budget, and signals to investors that the economy is fragile. Two years of progress can evaporate fast when you're hit with something you can't control.
But Pakistan is also hosting peace talks. Isn't that a way to solve the problem?
Yes, and that's the gamble. If Sharif can broker a ceasefire that holds and eventually leads to a deal, oil prices fall, shipping normalizes, and Pakistan's economy stabilizes. But it's a thin rope to walk. You're trying to mediate between two nuclear-armed powers while your own economy is bleeding.
What does it mean that Iran's foreign minister visited twice in 48 hours?
It means Iran is serious about negotiating, and it's using Pakistan as a channel. The fact that he met with both the military commander and the prime minister suggests Iran wants to make sure the message gets through at every level. It's also a signal to the US that there's momentum.
Trump extended the ceasefire indefinitely. Does that mean it's holding?
It means both sides agreed to keep talking instead of fighting. But indefinite doesn't mean permanent. It means there's still a deal on the table, and both sides are willing to negotiate. The real test is whether they can actually reach an agreement before someone loses patience.