US-Iran Conflict Fuels Oil Price Surge: Pakistan and Bangladesh at Risk

Pakistan and Bangladesh are among the Asian economies most exposed to the fallout from the prolonged US-Iran conflict, as surging global oil prices threaten to push up inflation and strain public finances.

The two countries heavily depend on imported fuel, making them particularly vulnerable to sustained increases in crude oil and diesel prices, according to a report by South China Morning Post.

Jamus Lim, Associate Professor of Economics at ESSEC Business School Asia-Pacific, noted that limited inventory buffers mean the impact of higher oil prices would be transmitted relatively quickly through their economies.

Oxford Economics has warned that several emerging markets, including Pakistan and Egypt, face a combination of geopolitical risks, political uncertainty, and rising debt-servicing costs.