Which Country Is Suffering the Most From the Oil Crisis?

Why It Matters

The oil crisis threatens to push already fragile emerging economies into balance‑of‑payments distress and record hunger, reshaping investment risk and humanitarian priorities across the region.

Key Takeaways

• Pakistan faces fuel rationing, school closures, online universities.
• Gulf remittances constitute over 5% GDP for four highlighted nations.
• Low foreign‑exchange reserves leave Pakistan, Jordan vulnerable to crisis.
• Egypt's $29 billion debt payment exceeds half its reserves.
• World Food Programme warns record hunger if Middle East conflict persists.

Summary

The Economist has identified fifteen emerging‑market economies most at risk from the oil‑price shock, ranking them by two metrics: exposure to Gulf‑supplied energy and the fragility of their macro‑economic fundamentals. Although none of these nations are directly involved in the war, their heavy reliance on imported oil and gas, combined with limited foreign‑exchange buffers, makes the conflict’s fallout especially painful.

The analysis highlights Pakistan, Jordan and Ethiopia as the most exposed, with Pakistan’s reserves covering less than three months of imports—well below IMF guidelines. Egypt faces a $29 billion debt service bill that consumes more than half its foreign‑exchange reserves, while Jordan’s high debt and dependence on Gulf remittances amplify its vulnerability. Four countries—including Pakistan—receive Gulf‑origin worker wages equal to at least 5% of GDP, underscoring the double‑edged risk of energy price spikes and remittance shocks.

Concrete examples illustrate the human impact: Pakistan has instituted fuel rationing, shuttered schools and shifted universities online; Nepal sees long queues for cooking gas; and Jordan grapples with soaring import bills. The World Food Programme warns that, without a swift end to the Middle‑East conflict, acute hunger could hit record levels by 2026, even if macro‑economic collapse is avoided.

The findings signal heightened geopolitical risk for investors and policymakers. Countries with thin reserves and high external debt may confront balance‑of‑payments crises, while rising food insecurity could trigger social unrest. Monitoring these vulnerabilities is essential for sovereign‑risk assessments, aid allocation and corporate strategies tied to the region’s energy and consumer markets.

Original Description

The number of people facing acute hunger could reach record levels in 2026, if the conflict in Iran does not end soon. The Economist has analysed some of the emerging markets most at risk, examining their reliance on imported energy and the fragility of their economies.

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