Geo-Politics and Geo-Economics: Analyzing the Israel/ US–Iran Conflict and Its sImplications for Pakistan

Abstract

The 2026 Israel/ United States–Iran conflict represents a critical intersection of geo-politics and geo-economics, reshaping power dynamics in the Middle East and beyond. Triggered by coordinated military strikes on Iran and subsequent retaliatory actions, the conflict has disrupted regional stability and intensified global strategic competition. Central to the crisis is the strategic importance of the Strait of Hormuz, through which a significant share of global energy supplies flows, making it a focal point of economic vulnerability and geo-political leverage. The resulting volatility in oil markets, supply chain disruptions, and heightened security risks have transformed the conflict into a global economic shock. The implications are profound and multidimensional. As an energy-import dependent economy, Pakistan faces rising inflation, balance-of-payments pressures, and fiscal instability due to fluctuating oil prices and disrupted trade routes. Simultaneously, its geopolitical position has elevated its role as a mediator, reflecting a delicate balancing act between strategic partners, including the United States, Iran, and Gulf states. This study argues that the conflict underscores Pakistan’s dual challenge of managing economic vulnerability while leveraging diplomatic engagement to safeguard national and regional stability.