Pakistan has reportedly signaled its readiness to activate a mutual defense pact with Saudi Arabia in response to escalating regional tensions in the Gulf. Foreign Minister Ishaq Dar confirmed that Islamabad has communicated the existence of this binding defense agreement to Iran as a deterrent against further escalation. This potential military involvement marks a significant strategic shift that could restore Pakistan’s status as a primary regional ally for the United States. However, the prospect of conflict is creating volatility across global financial markets and the energy sector. Analysts expect Brent Crude prices to rise on supply disruption fears, while safe-haven assets like XAU/USD are likely to see increased demand. Conversely, the Pakistani Rupee (USD/PKR) faces significant downward pressure as geopolitical risks weigh on the nation's economic stability.
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