Pakistan’s exports to Middle East countries declined by more than 2 per cent during fiscal year 2025-26 (FY26), reflecting the impact of prolonged geopolitical tensions and conflict in the region on bilateral trade.
According to data compiled by the State Bank of Pakistan (SBP), exports to Middle Eastern markets fell to $3.093 billion in FY26 from the previous fiscal year, as shipments to several key destinations weakened amid ongoing instability in the region.
The decline highlights the growing challenges facing Pakistani exporters as conflicts in the Middle East continue to disrupt supply chains, trade routes and business activity.
Exports Decline Across Major Markets
Pakistan recorded lower exports to several important trading partners, including Saudi Arabia, Qatar, Bahrain and Jordan, during FY26.
Among the Gulf countries, Saudi Arabia remained one of Pakistan’s largest export destinations despite a decline in trade. Exports to the Kingdom fell 3 per cent to $682.56 million in FY26 compared with $706.04 million recorded in the previous fiscal year.
Exports to Qatar, Bahrain and Jordan also registered declines during the year, reflecting weaker regional demand and the impact of ongoing geopolitical uncertainty.
However, Kuwait stood out as the only major market in the region where Pakistani exports increased during FY26.
Meanwhile, exports to the United Arab Emirates (UAE)—Pakistan’s largest export market in the Middle East—remained largely unchanged, helping limit the overall decline in regional exports.
Imports Also Register Decline
Pakistan’s imports from the Middle East also contracted during FY26.
According to the SBP data, imports declined 4 per cent to $16.413 billion, compared with $17.097 billion in the previous fiscal year.
The reduction was primarily driven by lower imports from Bahrain, Qatar and Kuwait, while imports from the UAE, Saudi Arabia and Jordan recorded growth during the same period.
The decline in imports reflects changing trade patterns as Pakistan adjusted its purchasing decisions amid volatile global energy prices and regional security concerns.
June Marks Fourth Consecutive Monthly Contraction
Trade data showed that June became the fourth month of import contraction since March, underlining the continued impact of geopolitical developments on Pakistan’s external trade.
The trend suggests that Pakistan’s import flows remain highly sensitive to developments in the Middle East, particularly disruptions affecting regional energy corridors and shipping routes.
Rising geopolitical risks have increased uncertainty in international commodity markets, influencing both the availability and cost of imported goods.
Pakistan Remains Dependent on Gulf Energy Supplies
Despite the decline in overall imports, Pakistan continues to rely heavily on the Gulf region for its energy requirements.
The data indicates that approximately 90 per cent of Pakistan’s energy imports originate from the United Arab Emirates and Saudi Arabia, making the two countries the nation’s primary energy suppliers.
Other Gulf producers—including Qatar, Kuwait, Oman and Bahrain—continue to play supporting roles in Pakistan’s energy imports despite their significant production and export capacity.
The country’s heavy dependence on Middle Eastern oil and petroleum products means that any disruption in regional supply chains can have a direct impact on Pakistan’s economy, inflation and energy security.
Trade Deficit Narrows in FY26
Although exports declined, Pakistan’s trade deficit with the Middle East narrowed during FY26 due to the sharper fall in imports.
The trade deficit decreased 4.48 per cent to $13.32 billion, compared with $13.94 billion in the previous fiscal year.
The improvement follows a challenging FY25, when Pakistan’s trade deficit with the Middle East widened 7.37 per cent to $13.97 billion, up from $13.01 billion recorded in FY24.
The narrower deficit suggests that slower import growth helped offset weaker export performance, although Pakistan continues to maintain a substantial trade imbalance with the region.
Regional Stability Remains Crucial
The latest trade figures underline the importance of stability in the Middle East for Pakistan’s external sector.
The Gulf region remains one of Pakistan’s most significant trading partners, supplying the bulk of its energy imports while also serving as an important destination for Pakistani food products, textiles, surgical instruments and other manufactured goods.
Analysts believe that sustained geopolitical tensions could continue to affect trade volumes, shipping costs and business confidence in the coming months. Conversely, an improvement in regional stability could support stronger export growth and smoother import flows, particularly in the energy sector.
With the UAE and Saudi Arabia remaining Pakistan’s key economic partners in the Middle East, future trade performance will largely depend on global oil market conditions, regional security and the pace of economic activity across Gulf economies.