ISLAMABAD, June 10: A potential settlement between the United States and Iran could unlock up to $20 billion in economic opportunities for Pakistan through expanded trade, lower energy costs, increased transit activity and stronger regional investment flows, according to a report by KTrade Research.
The report, reviewed by Wealth Pakistan, argues that Pakistan is positioned to benefit from improved regional stability because of its geographic location, trade links and infrastructure projects. It suggests that a durable US-Iran settlement could help offset economic losses Pakistan has experienced from regional tensions and disruptions in energy and trade routes.
According to KTrade Research, the conflict and disruptions affecting shipping through the Strait of Hormuz have cost Pakistan an estimated $10 billion to $14 billion, equivalent to roughly 2-3% of the country’s gross domestic product (GDP).
The report states that the economic fallout contributed to higher inflation, pressure on the current account and tighter monetary policy during 2026.
Trade and energy gains
KTrade estimates that nearly $2 billion of the potential economic upside could come from expanded trade with Iran if sanctions-related barriers are eased.
The report notes that Pakistan-Iran trade remains below historical levels despite close geographic proximity. Bilateral trade reached $1.32 billion in 2008-09 before declining significantly due to international sanctions on Iran.
According to the report, a more open trade environment could increase Pakistani exports to Iran, including rice, meat, textiles, fruits, paper products, surgical goods and agricultural commodities.
Energy savings represent another major area of potential benefit. KTrade estimates that the Iran-Pakistan gas pipeline could supply around 750 million cubic feet of natural gas per day from Iran’s South Pars gas field.
The report suggests that pipeline gas could be significantly cheaper than imported liquefied natural gas (LNG), potentially generating annual savings of $1.5 billion to $2 billion if it replaces a comparable volume of LNG imports.
Gwadar and regional connectivity
The report identifies Gwadar Port as a potential beneficiary of any regional realignment resulting from a settlement.
According to KTrade, Gwadar’s location outside the Strait of Hormuz could enhance its strategic importance for trade and logistics. The report estimates that port activity at current levels could generate between $50 million and $80 million annually in handling fees, in addition to revenues from transit trade, transshipment services and special economic zones.
The report also highlights the role of the China-Pakistan Economic Corridor (CPEC) in supporting regional connectivity. It suggests that existing and planned infrastructure could strengthen trade links between Pakistan, Iran, Central Asia, Russia and Europe.
KTrade noted that planned investment under CPEC has increased from $46 billion at its launch in 2015 to $62 billion through fiscal year 2030, with projects worth $24.7 billion already completed.
Investment and financial market impact
The report links additional opportunities to the Pakistan-Saudi Arabia Strategic Mutual Defence Agreement and related investment initiatives.
According to KTrade, these arrangements include a proposed $10 billion Saudi investment package and plans to expand bilateral trade between the two countries.
The report also suggests that a US-Iran settlement could improve Pakistan’s external sector by supporting foreign exchange reserves, strengthening exports to Gulf markets, easing inflationary pressures through lower energy prices and improving the current account balance.
Outlook remains dependent on regional developments
KTrade cautioned that the projected gains depend on several factors, including a phased settlement between the United States and Iran, uninterrupted commercial activity through the Strait of Hormuz, easing of sanctions-related restrictions and improved regional investment flows.
The report also noted that Pakistan would need to strengthen logistics networks, port efficiency and security conditions to fully capitalize on the opportunities.
Authored by M. Faran Khan, the report concludes that Pakistan could emerge as one of the key economic beneficiaries among emerging markets if a lasting US-Iran settlement materializes and regional trade and investment channels reopen.
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