Shipping containers stacked at Karachi port tell a story of shifting trade winds. Pakistan's exports to the Middle East slipped more than 2 percent in the fiscal year 2026, reaching $3.093 billion, as regional conflict continues to reshape commerce. Main Developments Exports to Saudi Arabia fell 3 percent to $682.56 million, while shipments to Qatar, Bahrain, and Jordan also declined. Only Kuwait recorded an uptick. Meanwhile, exports to the United Arab Emirates, Pakistan's largest regional market, remained stagnant. Imports from the Middle East contracted 4 percent to $16.413 billion in FY26, driven by reductions from Bahrain, Qatar, and Kuwait. However, imports from the UAE, Saudi Arabia, and Jordan grew. June marked the fourth month of contraction after March, highlighting how sensitive Pakistan's import flows are to geopolitical shifts, especially along energy corridors. Read also: 3 Schemes Worth Rs255bn Approved to Boost Pakistan's Exports Background Pakistan depends heavily on energy imports, with the UAE and Saudi Arabia accounting for a combined 90 percent share. Other Gulf states—Qatar, Kuwait, Oman, and Bahrain—remain secondary suppliers despite their export capacity. The trade deficit with the Middle East narrowed by 4.48 percent to $13.32 billion in FY26, compared with a 7.37 percent widening to $13.974 billion in FY25. Why It Matters The dip in exports signals that Pakistan's trade relationship with the Middle East is vulnerable to external shocks. Stagnant exports to the UAE, the top regional market, suggest limited diversification. The heavy reliance on energy imports from just two countries leaves Pakistan exposed to price swings and supply disruptions. What's Next Trade flows will likely remain volatile as long as regional conflicts persist. Pakistan may need to explore new export markets or deepen ties with secondary Gulf suppliers to reduce its energy import concentration. The narrowing trade deficit offers some relief, but sustained improvement depends on stabilizing geopolitical conditions.