Taking advantage of the crisis does not in any way mean that we are positioning the crisis or war as a romanticised event. Pakistan’s position has always been crystal clear: the correct forum is dialogue and diplomacy, and Pakistan is among those countries that believe in the United Nations to be a sacred organisation. But there are certain ways in which Pakistan can and should use the present crisis for a better Pakistan in the future.
One surprising and unexpected outcome of the War of Hormuz is the diplomatic space and the emergence of Pakistan on the international scene with a new identity: a country that has displayed a masterful ability to bring two hostile, warring parties, both of whom have immense trust issues with each other, to the table.
The statement by the Foreign Office on 2nd April that Iran and the United States had both expressed confidence in Pakistan as a mediator and facilitator of talks gave Pakistan a new role and a new standing in the international community. Pakistan’s diplomatic position can be very well judged by the frequent references to the comments and statements made by Pakistani officials, as well as the way Pakistan capitalised on its relationship with China and its role in the UN to call for both parties to extend the ceasefire.
This diplomatic capital has the ability to raise Pakistan’s stature not only in the South Asian region but also in the world. Conversion of diplomatic credibility into economic capital, such as energy assurance, safer trade corridors, labour protection understandings, and better market access etc. is an avenue that Pakistan should seriously consider. This can be referred to as “Diplomatic Dividend”.
The diplomatic dividend can be exploited and utilised if Pakistan uses its position as a strong mediator and cashes in on the relationship it has with the UAE, Qatar, Saudi Arabia, Türkiye, Egypt, China, and the United States. To put it differently, Pakistan has to position itself as a stable food supplier, textile exporter, and entry point for small manufacturing and selected services to Gulf markets when normalcy returns.
The Foreign Office, the Ministry of Commerce, and the state as a whole should follow this objective and use the current situation to Pakistan’s economic advantage. The first opportunity, in this regard, lies in the energy routing mechanisms. New arrangements of oil supply with Gulf states such as Saudi Arabia, the UAE, Qatar, and even the option of the Central Asian neighbour, Azerbaijan, should be explored.
Crisis response coordination with the Gulf states should be strong and swift. Pakistan has already had to explore route substitution. Islamabad sought Saudi supplies routed via the Red Sea port of Yanbu and was already moving some crude that way to reduce exposure to Hormuz-linked disruption and insurance costs.
Pakistan’s real strategic doctrine should now be prepared neutrality: neutrality in diplomacy, preparedness in energy, discipline in logistics, protection in labour, and purpose in economic statecraft
The second opportunity lies in logistics and the restructuring of energy reserves management. The Hormuz war makes Pakistan’s case stronger for petroleum reserve maintenance, diverse routes, increased domestic gas production, and renewable integration. These are more policy decisions than technical ones and therefore warrant urgent attention.
The shock strengthens the case for strategic petroleum reserves, route diversity, more domestic gas and renewable integration, and accelerated storage and transmission reforms.
The third opportunity lies in formalising border and regional trade where feasible. The overreliance on informal border trade with Iran, especially during an ongoing crisis, calls for tightly controlled legal mechanisms, improved customs monitoring, and a contingency plan for the people of Pakistan in general and Balochistan, in particular.
Policy action should not be a sweeping set of rules imposed without context. It should be a response that takes into account the social, political, and economic realities of the border regions, especially those districts that depend on trade from Iran.
The fourth opportunity lies in labour and remittances. The labour side shows concentration in Saudi Arabia, Qatar, and the UAE, with remittances from the GCC countries standing at 54% of the total of $38 billion in 2025. What these numbers actually point out, other than job opportunities for Pakistanis in the Gulf, is the vulnerability of Pakistan to a conflict-ridden Gulf.
Pakistan should move from low-skill outflow to skill-specific labour agreements, certification, and market diversification beyond the Gulf. The present situation has created an opening where Pakistani goods and Pakistani talent can be supplied to the Gulf and other markets such as Japan and Türkiye.
The policy response should be immediate and structural. Pakistan should create a standing inter-ministerial Iran-Gulf Shock Cell linking Finance, Petroleum, Commerce, Foreign Affairs, State Bank of Pakistan (SBP), Pakistan Bureau of Statistics (PBS), port authorities, and major utilities.
A working cell where Finance, Petroleum, Commerce, Ministry of Foreign Affairs (MOFA), SBP, and port authorities are fused can allow informed decisions to be taken in real time in response to changes in the situation. Pakistan should also publish weekly dashboard data on fuel stocks, LNG deliveries, power gaps, shipping disruptions, and retail prices to reduce panic and speculation.
Data on fuel stocks, reserves, consumption, LNG stock, delivery and distribution, power gaps, and retail prices may be published weekly. This will help in informed analysis and quick response to changing dynamics in the Gulf.
Negotiations with transporters and exporters of oil that do not use the Strait of Hormuz should be a priority of the government. The agenda should not be based only on the current War of Hormuz, but also on the possibility that such a conflict may arise again in the future.
These renegotiations should be the way forward in the future as well. Pakistan also needs to protect exporters from temporary freight and insurance spikes through targeted, time-bound support tied to shipment performance rather than blanket subsidies.
In other words, instead of blanket subsidies, the more efficient way is to protect exporters from spikes in insurance and freight charges if the subsidy is tied to shipment performance. These subsidies should be time-bound so that free-riding and its implications can be kept under check.
Moreover, the correct policy response to the War of Hormuz is three-fold. First, Pakistan should not approach the Iran-US conflict as a remote geopolitical spectacle. The present episode shows that it is already a domestic economic variable for Pakistan. It moves fuel prices, power shortages, shipping routes, freight costs, trade balances, labour security, and diplomacy.
Second, the current crisis has placed Pakistan in a powerful diplomatic position, and Pakistan therefore needs to take advantage of the diplomatic edge it has achieved. Alternatively, Pakistan must translate this diplomatic dividend into economic gains.
Third, at the same time, it must build shielding capacity so that if crisis 2.0 occurs, the country is not again exposed, reactive, and short of options. Pakistan’s real strategic doctrine should now be prepared neutrality: neutrality in diplomacy, preparedness in energy, discipline in logistics, protection in labour, and purpose in economic statecraft.