Pakistan's dollar-denominated bonds are experiencing their sharpest monthly decline in three years, driven by escalating oil prices stemming from the Iran conflict and ongoing tensions with Afghanistan. This selloff reflects deepening concerns among investors about the country's economic stability and ability to service its foreign debt. The surge in oil costs, a critical import for Pakistan, is squeezing government finances and corporate earnings, amplifying fears of a widening current account deficit and potential currency devaluation. Pakistan's bonds now trade at their lowest levels in months, signaling heightened risk aversion in emerging market debt.