The Pulse | Economy | South Asia

How the Iran War Is Disrupting Balochistan’s Economy

The world is preoccupied with energy prices and economic shocks. Meanwhile, the plight of Balochistan, which shares a long border with Iran, is being ignored.

A month after the United States and Israel launched air and missile strikes on Iran, global attention is largely focused on restricted maritime traffic in the Strait of Hormuz, rising oil prices, and fears of a global economic crisis.

Largely unnoticed is the plight of regions like Pakistan’s Balochistan Province, which shares a 900-kilometer-long border with Iran. Because its society and economy are closely linked with those of Iran, Balochistan is extremely vulnerable to disruptions due to the Iran war. Still, little attention is being paid to the looming crisis.

Balochistan is Pakistan’s poorest province. Over 60 percent of the population in this insurgency-wracked province is already living in multidimensional poverty. With very limited employment opportunities, cross-border trade serves not only as a source of income but as the only source of livelihood for thousands.

Like other parts of the world, fuel prices began to soar in Balochistan within the first two weeks of the war. While the exchange of goods has decreased, it has not yet halted.

Being so close to Ground Zero of the war, fears are growing in Balochistan with each passing day about how long the war will last and what will happen in the event of a sudden border closure. There is concern too over the scarcity of goods coming in from Iran, including food items, iron and other construction materials, and most importantly, fuel and natural gas.

For a region heavily dependent on Iranian goods for both daily consumption and cross-border trade, even minor disruptions cause serious economic shocks for days. The current situation is much more than a trade disruption. The war is dramatically changing the life of the Iranian people as they know it, and it will not spare Balochistan. What was previously just a risk scenario is now a lived reality for people on both sides of the border.

Rising fuel prices have forced the closure of schools and educational institutions since the second week of the war. The closures have since been extended, with no signs of schools being reopened soon. Many offices have also shifted either to remote work or have temporarily closed.

There is concern that, should this war be a prolonged one, the supply of Iranian-manufactured goods and energy, which Balochistan relies on, will be severely impacted.

Last week, Iran’s Khuzestan and Mobarakeh steel companies were targeted in air strikes. These were among the country’s most strategic and largest steel companies, employing thousands of civilians and exporting steel across the region.

In another attack last week, Iran’s South Pars natural gas field was hit. It was part of the world’s largest natural gas field and an economic lifeline for Iran. South Pars accounts for 80 percent of Iran’s natural gas production. It was attacked in June 2025 as well, but the recent strike is considered to be far more severe.

The current situation is being seen as the largest shock to energy supply in modern history. Oil prices have already........

© The Diplomat