By Qudsia Bano

Coordinated efforts by major international institutions to address the ongoing global energy crisis are expected to provide limited but important support for energy-importing economies like Pakistan amid rising geopolitical tensions in the Middle East.

Leaders of the International Monetary Fund (IMF), World Bank and International Energy Agency (IEA) have moved towards closer coordination to stabilise energy markets and support vulnerable economies facing supply disruptions and price volatility.

The push comes as tensions in the Middle East continue to affect global oil and gas flows, increasing uncertainty in international energy markets and putting additional pressure on import-dependent countries.

Pakistan, which relies heavily on imported fuels, faces rising risks as higher global prices increase its import bill and widen pressure on the current account. Elevated energy costs also contribute to inflation, complicating macroeconomic management.

Multilateral institutions are expected to respond through a mix of policy support and concessional financing. The World Bank has signalled its readiness to mobilise financial assistance for countries affected by energy and supply chain disruptions, while the IMF is likely to continue playing a central role in stabilisation efforts.

Economic experts in Pakistan see this coordination as a timely development.

Dr Muhammad Sakib, former principal economic adviser to the government, said that large external shocks require coordinated multilateral responses. He noted that access to concessional financing and policy support can help Pakistan manage short-term balance-of-payments pressures and avoid deeper economic disruption.

Dr Jalil Ahmed, Professor of Economics at the International Islamic University Islamabad, said the crisis once again highlights Pakistan’s structural dependence on imported energy.

He said continued reliance on external fuel sources exposes the economy to global price volatility, reinforcing the need to diversify towards domestic and renewable energy resources.

He also pointed to ongoing disruptions in key energy transit routes in the Gulf region, which have added to supply uncertainty and price fluctuations across Asia. For Pakistan, which depends on these routes for a significant share of its oil imports, this increases vulnerability to external shocks.

At the same time, global economic risks remain high. International institutions have warned that prolonged energy disruptions could slow global growth and sustain inflationary pressures, particularly in developing economies.

In this environment, coordinated international action provides a degree of stability for countries like Pakistan. While such support may not fully offset rising energy costs, it can help ease immediate external financing pressures.

The situation also reinforces the need for longer-term adjustments. Reducing dependence on imported fuels and strengthening domestic energy capacity will remain critical for improving resilience against future global shocks.

Credit: INP-WealthPk