Afghanistan, due to its high dependence on imports of energy and essential goods, as well as its geographical position within regional transit networks, is vulnerable to such geo‑economic developments.
Trade Between Iran and Afghanistan
Iran is considered one of Afghanistan’s most important economic partners. According to trade reports, the volume of trade between the two countries in recent years has reached approximately 2.5 to 2.7 billion dollars annually. A significant portion of Afghanistan’s imports, especially fuel, food products, construction materials, and consumer goods enters the country through its western borders with Iran. Under such circumstances, any crisis in Iran can raise serious concerns about the future of trade between the two countries.
However, evidence shows that border crossings between the two countries, including Islam Qal’e–Dogharoun and Milak–Zaranj, remain active, and the flow of goods continues as before. The continued operation of these crossings indicates that despite the war in Iran, the economic exchange network between the two countries has not yet experienced serious disruption.
Even with this relative stability, the region’s wartime environment may increase the indirect costs of trade. Rising transportation insurance costs, higher fuel prices for trucks, and uncertainty in regional markets are among the factors that may gradually increase the cost of importing goods into Afghanistan.
The Strait of Hormuz and the Global Energy Market
The Strait of Hormuz, located between Iran and Oman, is one of the most vital energy transit routes in the world and represents one of the most significant channels through which the war could affect Afghanistan’s economy. According to reports from the U.S. Energy Information Administration, around 20 to 21 million barrels of crude oil and condensates pass through the strait daily, accounting for roughly one‑fifth of global oil consumption. Military tensions or any disruption in this strait can disturb global oil markets and are usually quickly reflected in oil prices.
Energy market analyses also indicate that if the conflict continues, oil prices could rise to 100 to 120 dollars per barrel. Such an increase is highly significant for Afghanistan because the country is not an energy producer and supplies a large portion of its fuel needs through imports. In fact, more than 90 percent of Afghanistan’s fuel consumption is imported.
Vulnerability of Energy Infrastructure
Afghanistan’s dependence on energy imports is not limited to fuel; the country is also heavily reliant on electricity imports. According to data from Afghanistan’s national electricity company, a large portion of the country’s electricity is supplied through transmission lines from neighboring countries. Iran is one of the key suppliers of electricity to western Afghanistan, and the ongoing conflict may indirectly affect the cost of energy supply to the country.
Furthermore, rising global fuel prices could increase the cost of electricity generation in regional power plants, which may lead to higher prices for imported electricity.
Chabahar Port and Transit Routes
Chabahar Port, located in southeastern Iran, has in recent years become one of Afghanistan’s most important access routes to open waters. The port has been developed with Indian investment and is considered part of regional connectivity projects linking South Asia, Central Asia, and the Middle East. The cargo handling capacity of Chabahar is increasing, and in recent years more than one to one and a half million tons of goods have been transported through the port. Development plans aim to increase its capacity to several million tons per year in the future.
In recent days, some reports have suggested that the port had been shut down; however, Iranian officials rejected these claims and emphasized that its operations continue. For Afghanistan, maintaining activity at Chabahar is highly important because the port represents one of the country’s most important routes to maritime trade and international markets.
Impact of the Iran War on the Afghan Market
The economic effects of the war on Afghanistan are most likely to appear in the form of price pressures. Rising global oil prices, increasing transportation costs, and higher import prices could gradually lead to increases in the prices of fuel, food, and consumer goods in Afghanistan’s domestic market.
Since a large share of Afghanistan’s needed goods are imported, any change in global energy or transportation costs can quickly be reflected in domestic prices. This may place additional pressure on households and small businesses, particularly at a time when Afghanistan’s economy is still in a phase of stabilization and reconstruction.
However, the continued activity of trade borders with Iran and the ongoing operations at Chabahar Port indicate that the core infrastructure of regional trade remains functional, which could help prevent major disruptions in the supply of goods.
Security Outlook and Regional Economic Consequences
War in the Middle East, especially in Iran, typically increases economic instability across the entire region in addition to its military consequences. Higher investment risk, rising transportation insurance costs, and increased caution among trading companies are among the factors that may affect regional trade.
Under such circumstances, some transport companies may explore alternative routes or pay higher costs to move goods. This trend could raise the cost of trade and the price of goods in regional markets. Nevertheless, past crises have shown that regional economic networks generally attempt to maintain trade flows, as a complete halt in economic exchange would impose extremely heavy costs on countries in the region.
Conclusion
Overall, an examination of economic data and energy market trends shows that the economic consequences of war for Afghanistan will most likely appear in the form of higher energy, transportation, and trade costs. The potential rise in global oil prices, Afghanistan’s heavy reliance on imported fuel and energy, and increasing logistical expenses could place price pressure on the country’s economy.
However, the continued operation of border crossings between Iran and Afghanistan, along with the ongoing activity of Chabahar Port, indicates that the main infrastructure of regional trade is still functioning. Therefore, the primary effect of this crisis for Afghanistan is likely not the suspension of trade, but rather a gradual increase in economic costs and a more complex regional market environment.
