KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has warned that escalating military tensions in the Middle East and the closure of the Strait of Hormuz have triggered alarm across Pakistan’s trade and industrial landscape, with business leaders cautioning that soaring freight costs and delayed shipments could derail the country’s economy.
FPCCI President Atif Ikram Sheikh said that following the outbreak of the Iran conflict in late February 2026, global shipping markets have been thrown into turmoil. Commercial vessel traffic through the strategic waterway has slowed sharply, while shipping lines have imposed steep war-risk surcharges, raising fears of pressure on Pakistan’s balance of payments.
He called for immediate government intervention to protect the country’s trade and industrial sectors. Sheikh said geopolitical instability in the Gulf poses a serious threat to Pakistan’s export competitiveness, noting that around 80 per cent of the country’s crude oil imports and about a quarter of its liquefied natural gas (LNG) shipments transit through the Strait of Hormuz. Any prolonged disruption, he warned, could strain foreign exchange reserves and fuel inflationary pressures.
Sheikh said the financial impact on logistics had been immediate and significant. Container freight rates on major routes have surged, while shipping lines have introduced emergency war-risk surcharges ranging from $1,500 to $3,500 per standard container (TEU).
He cautioned that these logistical bottlenecks could severely affect Pakistan’s leading export sectors, as transit times to key markets in the EU and the US are expected to increase by 15 to 20 days due to vessels rerouting. If the disruptions persist, the value-added textile sector alone could see exports fall by 10-20 per cent this month, he said, adding that the country cannot afford a widening trade deficit under the current IMF programme.
Sheikh added that the crisis is already reverberating through the domestic economy, with transshipment rollovers and significant delays reported at Karachi’s port terminals after major global shipping lines suspended bookings from Pakistan for Gulf-bound cargo.
Saquib Fayyaz Magoon, senior vice president of the FPCCI, said the situation has been further aggravated by a recent Rs55 per litre increase in domestic diesel prices, which has pushed inland transportation costs up by an estimated 15-25 per cent. Industry representatives say standard 30-day fixed inland freight contracts are no longer viable, leaving exporters highly vulnerable to weekly fuel price fluctuations.
