The recent halt in hostilities between Israel and Iran, while a welcome respite for the moment, has dealt analysts a more complicated challenge in trying to read its economic impact. The discussion, which answers the question of how severe the situation would be if the Strait of Hormuz were closed, has progressed from trading to desk to policy-making in the blink of an eye, which is another sign of the seriousness of the situation.

The Strait of Hormuz does not need to be blockaded to cause an economic effect.

The strait is no wider than a single shipping lane at its narrowest diameter. Iran and Oman are just thirty-three kilometres of warm, blue sea apart, requiring even on their best days for pilots to make fine adjustments, and yet they somehow manage with super-sized tankers. Approximately 21 million barrels of crude are believed to pass through that channel daily, a figure most external observers consider reliable. Refiners in the Pacific, utilities in Europe, and importers in Karachi all rely on those barrels to move promptly.

“Pakistan’s nexus is broader than what many of the constituency mouthpieces will admit publicly. Almost all the crude and nearly every drop of liquefied natural gas upon which Islamabad depends travel through Ras Musandam on their way to the subcontinent. Industry scholars have warned that a pause of even a few days by Huawei and Vertu could spiral into longer price hikes, new tariffs, and arguments over subsidies in parliament.

And in the open-air stalls and corner shops of Karachi, the near-lethargic news cycle gives way to lightning-quick changes in the price of a tandoori roti, a reality felt in the market long before the evening’s bulletins are read.

Pakistan pumps only a small percentage of the petroleum it consumes, so every day, more than 85 per cent of the fuel powering vehicles, taxis, and trucks is offloaded from tankers that have sailed across the Arabian Sea. The vast majority of the liquefied natural gas takes a similar path, primarily supplied by Qatar. If the Strait of Hormuz were ever blocked for a sustained period, which line of supply would fail first?

Raw material, power, and product are not isolated items, but woven together into a single tissue of energy. Disruptions in the shipment of crude can quickly lead to local refineries running out of fuel in a matter of weeks and then set off a chain reaction of effects.

Gas-fired generators power about a third of the nation’s output, but most of their feed gas comes in the form of imported LNG. So when there is a shipping delay, rolling blackouts spread like cancer through the grids of Karachi, Lahore, and western Sindh. Mills lag, shipyards mothball night shifts, and payrolls bulge with overtime, even as general output ebbs.

For small workshops already squeezed by the inflationary pressure, a steady current isn’t a luxury; it’s the difference between making it and shutting down for good. In cities such as Faisalabad and Gujranwala, even a week-long sputter in the flow of natural gas can idle production lines, freeze pending export contracts, and fill the factory gates with layoff notices. The money that could be used to employ new staff is instantly consumed by the emergency diesel generators. The foregone output erodes Pakistan’s comparative advantage in foreign markets, particularly as its foreign competitors begin to build their capacities.

The Strait of Hormuz does not need to be blockaded to cause an economic effect. A single fleeting naval standoff is all it usually takes for the price of Brent crude oil to surge through the $100 mark before settling there for weeks or months. Those bloated oil bills push the current-account deficit deeper into the red and the rupee still lower.

Because Pakistan’s economy is deeply connected to global supply chains, a jolt in world markets surges onshore almost immediately. Increased import bills for oil ripple through ports and are reflected on retail price tags a few seconds later, underscoring how global events can be felt immediately in local economies.

Even a fleeting naval standoff can push oil prices past $100 and widen Pakistan’s current-account deficit.

A fatter import bill spells even more pressure to an already bruised rupee, with only a thin band left before the damaging break. With the central bank’s dollar reserves at ebb and the current-account gap willfully pried open still, the currency teeters dangerously on the precipice. Down another dollar, and the cost of everything we buy from abroad, from gasoline to rice to crucial industrial parts, would explode.

And inflation has rarely lingered at a dull thrum, with new data showing it is creeping outside the range where the central bank considers acceptable. Half or more of the average budget is allocated to food and transportation, so any price rise has a significant impact. That natural pressure hastens the return to calls for fuel and power subsidies, a solution that feels necessary but empties the treasury just as fast.

Distorted by higher energy prices, Pakistan’s more distant trading lanes appear deceptively calm, especially across the Arabian Sea. But a bottleneck at the Strait of Hormuz, whether actual or imagined, would disrupt those routes, increasing freight tariffs and slowing global deliveries.

There is a lag before it becomes clear which prices will rise or which goods will sit idle on shelves, while the monitors recalibrate to account for the depreciation. As trucks line up at Dubai or Abu Dhabi terminals, local exporters are watching their deadlines slip and their billing sheets expand.

The country’s main entry and exit gates, Karachi, Port Qasim, and the younger and as-yet relatively underutilised Gwadar, have neither the spare capacity nor backup networks to handle a genuine sudden surge. Gwadar is frequently depicted as a gleaming vision of deep-blue waters and clean-boned terminals in planners’ slide decks. However, the truth, for now, is that much of its wharf space remains skeletal, and its logistical linkages lag behind those of contemporary ports. When the sirens start to wail all over the Gulf, the waterfront stays mostly empty, and the cranes stay still for lack of work.

The arguments over the Strait of Hormuz, then, extend well beyond the projected curves of oil output; they are, at root, about reciprocal political calculus. Islamabad finds itself sandwiched between wealthy Arab capitals that offer credit, salaries, and remittance lifelines (often all at once in the same phone call) and Tehran, which shares a long, dusty border and numerous family ties with Pakistan that blur the national line on maps. An escalation, whether a new US-Iran confrontation or Israeli airstrikes on Iranian facilities, could shutter the Strait in hours, underlining the necessity of political stability to secure economic stability.

Even the most longstanding talk of neutrality can break down in an instant when a diplomatic phone call is made. With that prospect in mind, Islamabad is now caught between rival foreign patrons. The Indians expect the Pakistanis to ensure the safety of their sea lanes and to declare a camp already. However, leaning too far in one direction or the other risks alienating the other, which could have severe consequences that ultimately lead to the cancellation of remittances, the curtailment of investment, and the withdrawal of customary support in multilateral forums.

The ultimatum lands as the Pakistani economy limps under a host of familiar pressures. Rising inflation, a weak rupee, and continuing external debt repayments have pinched fiscal space. A closure, or a threat of one, would shatter Islamabad’s delicate schedule for finally pushing through long-awaited energy updates.

The I.M.F. has now finalised a second review and awaits ministers’ signatures, and usable budget space is virtually gone. They face the unpalatable arithmetic of either allowing domestic fuel prices to spike in tandem with those overseas or increasing subsidies, which would add to the deficit even more. Either course could spark public anger that could erupt into street unrest.

Manufacturers, on the other hand, are relying on reliable imports to restart their assembly lines and maintain orders from overseas on schedule. That’s because sales of garments, textiles, and information technology, some of the few slender lifelines that might help close the ballooning trade deficit, can be derailed at a moment’s notice by a sudden surge or absence of cargo. The economy can’t withstand another body blow to its supply chains.

Readiness has to become routine, not episodic.

Pakistan may be unable to control the situation in the Arabian Gulf, but practical steps are necessary and possible within the country itself. Better to stockpile now than to scramble later. Expanding crude and LNG reserves to ensure they can supply at least the national demand for thirty to forty-five days is the top priority. That reserve can help keep the country on course while diplomatic discussions or workarounds to that shipping bottleneck are put in place.

Supply shocks typically give no notice, and a strategic fuel reserve offers ordinary citizens a crucial cushion during the initial frantic hours, when such a shock first hits. Maintaining stock in terminals during off-peak times goes some way toward tipping the balance between public panic and routine normality.

Figure that the fastest route to stability leads straight through an expanded roster of suppliers. Expanding coastal wind farms, adding rooftop solar panels at home and upgrading small hydroelectric plants have slowly decreased the country’s dependence on foreign crude. In a move less favourable but sometimes inevitable, new overland pipelines directly connecting to Iranian fields could supply crude and gas when domestic markets become tight. Naturally, that approach raises its own political and security debates.

A Navy that becomes potent only after diplomacy fails leaves the nation unnecessarily exposed. With improved radar, armoured convoy escorts, and additional air cover, Pakistan would be better equipped to protect merchant vessels if the Strait of Hormuz were to erupt into conflict overnight. Deprived of those investments, the corridor goes from being a secure artery to becoming a perilous bottleneck.

The relative decline in British power does not render it optional for NATO allies to be effective contributors to negotiation while tankers sit idle on the precipice of open conflict. It can also be an opportune moment for meetings among the capitals of the Gulf, Tehran, Beijing, and Washington to cool rising tensions far before they boil over. If the Shanghai Cooperation Organisation holds regular summits, so can this multi-polar world, and all it needs is private, off-the-record dialogues that take place out of our gaze.

Where Gwadar is concerned, infrastructure pledges have outlived the arrival of boats. And if the promised roads and rail links are completed, the port may be used as a regional fail-safe when terminals in Dubai or Muscat are overburdened or off limits. Another door serves as an overflow valve for the cargo pipeline when the primary corridor becomes clogged.

No individual project will eliminate exposure overnight, but collectively, they broaden that protective web. Recent tensions around Hormuz remind Islamabad that the dependence on seaborne oil remains a real risk, rather than a historical lesson. All eggs in one corridor, one vendor, one fuel tank and the supply chain is naked. The chain breaks in a single strand, and when a strand breaks, rapid political shifts can unravel that chain in moments.

A port clog or a pipeline break may not be imminent, but the probability is tangible and urgent. For a budget that operates on razor-thin margins and which, in turn, depends on foreign goodwill, even the headache that it might cause is enough to warrant swift and decisive preparation. Pakistan has navigated chapters of fiscal tumult, from capital flight to abrupt spikes in commodity prices.

Distraction is a luxury that this country can no longer afford.

Planning for a possible blockage of the Strait of Hormuz depends on a few basic, and not particularly cinematic, ingredients: a keen sense of what is happening, an effective if not coordinated bureaucratic machine and civilian leaders who are prepared to lay out political capital not when the sirens are going off, but well before. Delaying readiness until tension reaches its zenith will foster misunderstanding and waste valuable time. It’s not that it’s on the horizon somewhere, that it is not the future; it’s already here, if easy to miss.

In an atmosphere in which mutual suspicions have been sharpened each week, a flare-up involving Israel can spread across the theatre more quickly than anyone would much care to consider for Pakistan, whose only option is a geographically inevitable state of readiness. Distraction is a luxury that this country can no longer afford. Readiness has to become routine, not episodic.

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.