SAARC Chamber of Commerce and Industry former President Iftikhar Ali Malik has said the Ukraine-Russia war and the escalating tensions in the Middle East following the US-Israel conflict with Iran had fundamentally altered the global economic landscape, triggering a structural reset of the world economy and the emergence of new strategic alignments.
In a statement issued here on Sunday, he said the convergence of the Ukraine-Russia conflict and the Middle East crisis marked the end of the old global energy order, with a new system taking shape in which energy security outweighed economic efficiency, geopolitical considerations dictated trade flows and costs remained structurally elevated. He said that the Ukraine-Russia war initially disrupted the global energy architecture, while the growing instability in the Middle East had further deepened the crisis. Energy markets, he said, had increasingly become strategic instruments, supply chains were being reconfigured and global trade patterns were now being shaped more by geopolitical interests than by market economics. Iftikhar Ali Malik said Europe had replaced relatively inexpensive energy supplies with costly security considerations, while energy itself was no longer merely a commodity but a strategic asset. At the same time he added, the era of globalization was gradually giving way to fragmentation and competing economic blocs.
He added that major Asian economies, including China, India, Japan and South Korea, were actively seeking alternative energy sources to safeguard their energy security. Europe, meanwhile, was facing intensified competition for liquefied natural gas (LNG) supplies, while the United States had strengthened its position as a leading global energy supplier. As a result, energy flows were increasingly being reorganized along political and strategic lines rather than purely economic considerations, he added.
He said the implications extended well beyond oil and gas markets, as higher energy costs directly increased transportation, manufacturing and food prices, reviving concerns of stagflation reminiscent of the global oil shocks of the 1970s. He said the world economy was increasingly fragmenting into separate spheres, including a US-led LNG system, a discounted Russian energy network largely serving Asian markets, and a Middle Eastern oil corridor vulnerable to recurring geopolitical tensions and conflict.
Referring to Pakistan, Iftikhar Ali Malik said the rapidly changing global environment posed significant challenges for vulnerable economies, but also created an opportunity for the country to reassess its long-term energy and economic policies. He stressed that Pakistan must adapt swiftly to the new realities of international trade, energy security and geopolitical competition.
He emphasized the need for a coherent and sustainable long-term policy framework rather than relying on short-term crisis management. Without comprehensive structural reforms, he warned, every major global energy shock would continue to undermine Pakistan’s domestic economy and external sector performance.
He said that strategic planning, energy diversification and economic reforms were essential to enable Pakistan to navigate the evolving global order and build greater resilience against future external shocks.