Pakistan’s Gulf exports plunge $387 million amid US‑Iran conflict

ISLAMABAD – Pakistan’s exports to Gulf Cooperation Council (GCC) nations have fallen short by $387 million from March to October, a senior commerce ministry official said on Wednesday. The shortfall stems from the US‑Iran conflict, which has disrupted shipping lanes, driven up freight and insurance costs, and impaired the movement of agricultural and industrial goods.

The dispute began with US and Israeli strikes on Iran in February, choking off energy and cargo flows through the Strait of Hormuz, a critical waterway between Iran and Oman. Tehran maintains a firm grip on the strait, while Washington continues a counter‑blockade of Iranian ports.

According to the commerce ministry, Pakistan’s shipments to the six‑member GCC bloc dropped by $316.9 million (32.3 %) in March‑June compared with the same period the previous year. The decline narrowed to $69.8 million (6.4 %) during July‑October. A ministry presentation titled “Impact of Iran Conflict on Pakistan’s Trade with GCC” put the cumulative shortfall at $387 million for the March‑October 2026 period.

“As soon as the conflict started, the impact was highly visible,” Commerce Secretary Jawad Paul told a parliamentary panel on Wednesday, noting that Pakistani businesses have gradually adapted to the new trade environment.

The GCC – comprising Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman – is a key destination for Pakistani agricultural and textile products and a major source of the country’s energy imports.

Elevated war‑risk insurance premiums, container shortages, longer shipping routes and airspace closures have driven up transportation costs and disrupted deliveries. Freight charges from Karachi to major Gulf ports have risen sharply, with rates for a 40‑foot dry container to Qatar’s Hamad port climbing from $1,300‑$1,900 to $8,500‑$8,800. Shipments to Kuwait’s Shuwaikh port now cost about $8,500, up from $1,800‑$2,000. Air freight to the UAE’s Jebel Ali port has increased to $5,000‑$6,000 from $1,200‑$2,000, the ministry reported.

During the initial phase, the UAE and Qatar were the hardest hit: Pakistani exports fell 42.7 % ($264.8 million) and 49.8 % ($15 million), respectively. Kuwait saw a 38.7 % decline, Oman a 25.1 % drop, and Bahrain a 13.3 % reduction. Saudi Arabia recorded a comparatively modest decline of 1.7 %.

To aid exporters, the government established an inter‑ministerial committee in March to coordinate responses with relevant departments and private‑sector stakeholders.

Subsequent measures included the introduction of dedicated cargo flights and increased frequency, especially for meat exports, and negotiations with regional carriers Emirates, Gulf Air and Jazeera Airways for lower air‑freight rates. Port‑handling charges were also reduced by up to 60 % after talks with port operators, according to Paul.

The official said the government has identified additional avenues to cut transportation and port costs “through active daily coordination.”

Pakistan has also pursued alternative trade corridors and export destinations as regional disruptions complicate access to traditional markets. Exporters have turned to the Khunjerab‑Sost border with China, while some shipments have been redirected to Southeast Asian and African markets, the commerce ministry said.

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