Developing: Pakistan Declares 'Open War' on Afghanistan — What the Escalation Means for Defense Stocks, Oil Prices, and Emerging Market Risk
Pakistan declared "open war" on Afghanistan on Friday after the two South Asian neighbors exchanged overnight airstrikes and ground attacks in the most significant military escalation between them in decades. Defense Minister Khawaja Mohammad Asif said Pakistan's "patience has run out" after the Afghan Taliban launched what it called retaliatory strikes on Pakistani military installations, triggering Pakistani bombing raids on Kabul, Kandahar, and Paktia province. The fighting represents a sharp departure from the fragile ceasefire brokered by Qatar and Turkey in October 2025, which had held despite sporadic border skirmishes. Both sides claimed heavy casualties — Pakistan's military spokesperson said 274 Taliban fighters were killed across 22 targeted sites, while the Taliban claimed 55 Pakistani soldiers were killed and 19 army posts destroyed. The BBC, CBS News, NBC News, and Fox News all report that independent verification of these claims has not been possible. For financial markets, the conflict introduces a new source of geopolitical risk in South Asia — a region where nuclear-armed Pakistan shares a 1,615-mile border with Taliban-controlled Afghanistan. The implications extend from defense sector spending to oil supply route concerns and emerging market contagion, arriving at a moment when global investors are already navigating elevated uncertainty from the U.S.-Iran nuclear standoff and ongoing Russia-Ukraine tensions.