Pakistan's economy, supported by the IMF, is increasingly vulnerable due to stalled mediation efforts between the US and Iran. The ongoing Middle East conflict, coupled with soaring oil prices and limited foreign exchange reserves, poses a significant threat to the nation's fragile financial stability.

Pakistan’s bid to mediate between the US and Iran has put Islamabad near the centre of efforts to defuse the Middle East conflict, but with no lasting peace yet in sight, its fragile economy is becoming increasingly exposed to the fallout from the war. While soaring oil prices and disrupted flows through the Strait of Hormuz have led to turmoil in global energy markets, analysts said Pakistan has especially limited room to absorb the blow because of its thin foreign exchange reserves, dependence...