Growing Discontent Across the Arab World

As the conflict between the United States and Iran enters a more dangerous phase, another challenge is quietly emerging across the Middle East. While global attention remains focused on air strikes, missile exchanges and military strategy, America's Arab partners are confronting a growing strategic dilemma. The longer the war continues, the greater the political, economic and security costs they will have to bear. For many Arab governments, patience is not unlimited.

For decades, the United States has been the principal security partner of several Gulf states, maintaining military bases and providing strategic protection against external threats. Today, however, those same military installations have become potential targets for Iranian retaliation. Every attack on a US base in the Gulf exposes the host country to risks it neither initiated nor seeks.

As tensions escalate, Arab governments face the difficult task of preserving their security partnerships with Washington while preventing their own territories from becoming battlefields in a widening regional conflict.

The economic implications are equally serious. Gulf economies are no longer driven solely by oil exports. Through ambitious diversification programs, countries across the region are investing heavily in tourism, finance, technology, logistics and manufacturing. These reforms require political stability, investor confidence and uninterrupted trade. A prolonged war threatens all three. Rising insurance premiums, uncertainty in financial markets and disruptions to maritime commerce could undermine years of economic planning.

The Strait of Hormuz and the Red Sea remain two of the world's most important maritime corridors. Any disruption to these routes would directly affect the export-dependent economies of the Gulf and reverberate throughout the global economy. While energy prices have remained relatively stable so far, Arab leaders understand that a prolonged conflict could eventually jeopardize both regional prosperity and international energy security.

Equally significant is the political dimension. Across the Arab world, public concern over regional instability and humanitarian suffering continues to grow. Governments must balance their strategic ties with Washington against the expectations of their own citizens, who increasingly want their countries to avoid becoming participants in another prolonged regional war. This balancing act becomes more difficult with every passing day.

The conflict also threatens to reverse the diplomatic progress achieved in recent years. Several Arab states have worked to reduce regional tensions, rebuild diplomatic relationships and promote economic cooperation. A wider war could undo those gains, deepen regional polarization and weaken collective efforts to build a more stable Middle East.

History offers a sobering lesson - wars in the Middle East rarely remain confined to their original battlefield. These spill across borders, reshape alliances and leave behind long-lasting political and economic consequences. Military victories may be celebrated in the short term, but the costs of prolonged conflict are borne by entire societies.

For America's Arab partners, the overriding priority is not the military defeat of Iran or the strategic success of Washington. Their foremost interest lies in safeguarding their sovereignty, protecting their economies and preserving regional stability. As the costs of continued escalation mount, pressure for diplomacy will inevitably grow.

The longer the war continues, the greater the Arab world's discontent—and the stronger the demand for a political solution that ends the cycle of confrontation before it engulfs the entire region.

 

Seven Days of US Strikes, No Strategic Breakthrough

Seven consecutive days of United States air strikes on Iran have raised a fundamental question, has Washington moved any closer to achieving its strategic objectives? Judging by the available evidence, the answer appears far from convincing. Military campaigns are ultimately measured not by the number of missiles fired, but by the political and strategic outcomes they produce.

Despite the intensity of the operation, remarkably little official information has been released about the military targets destroyed or the extent of the damage inflicted. In modern warfare, governments are usually quick to showcase decisive battlefield successes. The absence of detailed battle damage assessments has inevitably fueled speculation that the campaign has yielded fewer tangible results than expected.

Equally concerning are reports that civilian infrastructure and public utilities have been affected. If the intention is to increase economic hardship and public suffering in the hope of provoking unrest against Tehran, such a strategy carries significant legal, moral and political risks. Under international humanitarian law, deliberate attacks on civilian objects that are not legitimate military targets could raise serious questions about compliance with the laws of armed conflict. Greater transparency is therefore essential.

The broader strategic picture also remains uncertain. One apparent objective has been to pressure Iran by disrupting regional energy security through the Strait of Hormuz. Yet global oil markets have remained relatively calm, with crude prices staying below the psychologically important threshold of US$100 per barrel. Markets appear unconvinced that energy supplies will face prolonged disruption.

Attention is now increasingly focused on the Red Sea, another critical maritime corridor for global trade and Gulf energy exports. Any escalation there would broaden the conflict, increase risks to international shipping and place additional economic and political pressure on Arab oil-exporting states.

Perhaps the campaign's most significant consequence has been political rather than military. Iranian retaliatory strikes against American military installations in Gulf countries have heightened regional tensions and risk fuelling anti-American sentiment. For governments hosting US military bases, the political cost of continued escalation could become increasingly difficult to manage.

History offers a consistent lesson - air power can destroy military assets and infrastructure, but it rarely secures lasting political victories on its own. If anything, sustained external military pressure often strengthens national resolve rather than weakens it.

After seven days of strikes, Washington appears to have achieved neither a decisive military breakthrough nor a clear political advantage. Unless diplomacy regains priority, the conflict risks expanding while the prospects for a durable peace continue to diminish.

PSX benchmark index down 3.5%WoW

Pakistan Stock Exchange (PSX) remained under pressure during the week ended on Friday, July 17, 2026. The benchmark index closed the week at 175,803, down 6,439 points or 3.5%WoW, with average daily trading volume declining to 911 million shares, down 29%WoW.

During the week market driven by uncertainties surrounding the US-Iran conflict, with the US threatening to strike Iran’s energy facilities.

Re-imposition of the naval blockade of Strait of Hurmuz pushed oil prices above US$86/bbl, the highest level since the MOU was signed between the two countries.

On the macroeconomic front, Current Account posted a deficit of US$139 million in FY26, as against a US$1.8 billion surplus during the same period last year.

Net FDI dropped 34%YoY to US$1.6 billion in FY26.

Foreign exchange reserves held by State Bank of Pakistan (SBP) decreased by US$1.2 billion to US$17.2 billion as of July 10, 2026, due to debt repayments.

LSM index increased by 6%YoY in 11MFY26.

Auto sales rose 33%YoY for the industry in FY26 to 244,000 units, led by stable prices, lower financing rates, and discount offers by OEMs.

IT exports surged 21%YoY to a record high of US$4.6 billion in FY26.

Other major news flow during the week included: 1) HSD/MS price are likely to be increased over the weekend, 2) Electricity generation marginally increased by 1%YoY in FY26, 3) Textile exports inched up to US$17.9 billion in FY26, 4) Largest LNG carrier berthed at Port Qasim, and 5) Pakistan, Saudi Arabia agreed to expand energy cooperation.

Active sectors were: Jute, Refinery, and Technology & Communication, while lagged included: Textile Weaving, Synthetic & Rayon, and Transport.

Major selling was recorded by Mutual Funds amounting to US$37.6 million, while major buyers were Foreigners and Individuals aggregating to US$33.2 million.

Top performing scrips were: PIOC, CNERGY, and TPLRF1, while laggards included: IBFL, KTML, YOU, KEL, and ISL.

According to AKD Securities, any positive progress on US-Iran conflict, along with moderating international oil prices towards pre-conflict levels would remain the key focus.

Additionally, favorable financial results for the period ended June 30, 2026 would support market sentiment in the near term. Market continues to trade at attractive valuations.

Top picks of the brokerage house include OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.

Why Is Iran Reluctant to Attack Israel Directly?

Every time hostilities flare in the Middle East, a familiar pattern emerges. Israel strikes Iranian targets, and Iran often retaliates by targeting US military installations or interests in the region rather than launching a sustained direct attack on Israel. This recurring pattern raises an intriguing question, if Israel is Iran's declared adversary, why does Tehran so often avoid direct military confrontation?

The answer lies not in fear alone but in strategic calculation.

Iran understands that a large-scale attack on Israel would almost certainly trigger an overwhelming response. Israel possesses formidable military capabilities and enjoys unwavering political, diplomatic, and military backing from the United States. A direct war could inflict severe damage on Iran's military infrastructure, economy, and internal stability. No responsible government willingly enters a conflict where the costs are likely to far outweigh the gains.

Military realities reinforce this caution. Israel has developed one of the world's most sophisticated, multi-layered missile defense systems. While these defenses cannot intercept every missile or drone, they substantially reduce the effectiveness of mass attacks. Iran must therefore consider whether expending expensive missiles would achieve meaningful military objectives or merely expose the limitations of its own arsenal.

Geography further complicates the equation. Iran and Israel do not share a common border. Any missile or drone attack must cross or approach the airspace of several regional states. Countries such as Jordan have, on occasion, intercepted projectiles traversing their airspace to protect their own national security. These operational challenges make sustained direct attacks considerably more difficult.

Instead, Iran has adopted what appears to be a strategy of calibrated retaliation. Rather than seeking decisive military victory, it aims to impose costs while preventing the conflict from escalating into a regional war. This explains Tehran's preference for targeting US military bases, conducting cyber operations, disrupting maritime traffic, and relying on allied armed groups to project influence.

From Iran's perspective, the United States is not merely Israel's ally but its principal strategic enabler. Washington provides military assistance, intelligence, advanced weaponry, and consistent diplomatic support. Consequently, Tehran may calculate that increasing pressure on American military assets sends a message to both Washington and Tel Aviv without immediately crossing the threshold of an all-out war.

This does not mean Iran lacks the capability or the willingness to strike Israel directly. It has done so under exceptional circumstances. However, those attacks have generally been carefully measured, suggesting that deterrence and escalation management remain at the heart of Iranian strategy.

The Middle East is often viewed through the lens of ideology and rhetoric, yet military decisions are usually driven by hard strategic calculations. Iran's conduct reflects this reality. Rather than pursuing an unrestricted war with Israel, Tehran appears to be balancing retaliation with restraint, seeking to preserve its deterrent capability while avoiding a conflict that could threaten the survival of the Iranian state.

Understanding this distinction is essential. In geopolitics, actions are rarely dictated by slogans alone. More often, they are shaped by the cold arithmetic of power, capability, and consequence.

Why Are We Scared of Telling the Truth?

The first casualty of war is often the truth. Yet an equally disturbing reality is that many of us become unwilling participants in this process. We repeat official narratives, avoid uncomfortable questions, and hesitate to challenge the assumptions promoted by powerful states. Whether out of fear, political convenience, or media influence, we often stop asking whether there is another side to the story.

The present conflict involving the United States, Israel, and Iran offers a striking example. Much of the international discourse has focused on Iran's actions, while comparatively less attention has been given to the timing of the US-Israel military campaign, which began while diplomatic engagement over Iran's nuclear program was still underway. For many observers, this raises legitimate questions about the sincerity of negotiations and the priority given to diplomacy.

Another issue that receives limited discussion is the strategic importance of Iran in the regional balance of power. Many analysts argue that Washington and Tel Aviv view Iran as the principal obstacle to establishing a security order aligned with their interests in the Middle East. Whether one agrees with this assessment or not, it deserves open debate rather than dismissal.

Similarly, public discussion often frames Iran as the principal source of instability in the region, while criticism of Israel's policies receives comparatively less prominence. Across much of the Muslim world, perceptions differ significantly from those commonly reflected in Western political discourse. Ignoring these perspectives does little to promote mutual understanding.

The same applies to the role of the United States. Its military presence across the Arabian Peninsula is generally explained as necessary for regional security. Critics, however, argue that this presence also serves broader strategic objectives, including controlling energy routes and preserving American influence over one of the world's most important oil-producing regions. These competing interpretations should be examined rather than silenced.

Likewise, incidents involving attacks on US military installations in Gulf countries are frequently portrayed as attacks on the host nations themselves. Others contend that these bases are part of a broader geopolitical confrontation between Washington and Tehran. The distinction is important because it shapes how audiences understand the conflict and assign responsibility.

Healthy democracies are built not on unquestioning acceptance of official narratives but on the courage to ask difficult questions. Truth is rarely served by silence, selective reporting, or fear of challenging powerful interests. If meaningful peace is ever to prevail in the Middle East, the international community must be willing to examine every narrative critically, apply consistent standards to all parties, and encourage honest debate rather than suppress uncomfortable questions. Only by overcoming our fear of speaking openly can we hope to move closer to a more balanced understanding of one of the world's most consequential conflicts.

Beyond Hormuz: Is Yemen the New Diversion?

The attempt by an Iranian aircraft to land in Houthi-controlled Yemen, and the swift response by Saudi-backed Yemeni forces to prevent it, should not be viewed as an isolated aviation incident. It may represent another chapter in the wider geopolitical contest unfolding across the Middle East. More importantly, it raises a strategic question: Is the focus on Yemen intended to shift international attention away from the Strait of Hormuz?

For decades, the Strait of Hormuz has remained the world's most critical maritime energy corridor. Roughly one-fifth of global oil and a significant share of liquefied natural gas exports pass through this narrow waterway. Any instability there has immediate consequences for energy prices, inflation, global trade and financial markets. It is also the one strategic chokepoint where Iran possesses considerable geographic leverage.

Against this backdrop, renewed attention to Yemen is unlikely to be accidental. By reigniting tensions around Sanaa, the Red Sea and Bab el-Mandeb, Washington and its regional partners can compel Iran to divide its strategic focus. Instead of concentrating on Hormuz, Tehran must also devote diplomatic, military and logistical resources to protecting its interests in Yemen.

For Saudi Arabia, preventing Iranian flights from landing in Houthi-held territory serves immediate security objectives. For the United States, the broader strategic benefit lies in expanding the theatre of competition. A conflict confined to Hormuz leaves Iran operating in its strongest geographic position. A conflict stretching from the Persian Gulf to the Red Sea forces Tehran to manage multiple fronts simultaneously, thereby diluting its leverage.

Whether this reflects a carefully coordinated strategy or the convergence of regional interests remains open to debate. Yet the cumulative effect is unmistakable: international attention shifts from Hormuz to Yemen, from energy security to aviation disputes, and from the Persian Gulf to the Red Sea.

The Middle East has long demonstrated that perception is as important as military capability. In modern geopolitics, shaping the narrative often shapes policy. The latest confrontation in Yemen may therefore be less about one aircraft than about redirecting the world's strategic gaze. While headlines focus on Sanaa, the Strait of Hormuz—the true center of the region's geopolitical gravity—risks fading into the background. That, in itself, may be the most significant development.

Shanghai overtakes London in shipping hub rankings

According to Seatrade Maritime News Shanghai has taken second place in the 2026 Xinhua Baltic International Shipping Centre Development Index (ISCDI), breaking London’s six-year streak as runner in the ranking of global shipping hubs.

Singapore earned the top spot, a position it has held for all 13 years of the report’s history. With London slipping the third place, Hong Kong and Dubai rounded out the index’s top five cities.

Ningbo-Zhoushan overtook Rotterdam to become the sixth-highest-ranked shipping centre, while New York and New Jersey jumped up two places to eighth, overtaking Athens and Hamburg. There were no new entrants to the top 20.

Analyzing Shanghai’s ascendancy in the rankings, the report noted the city stood in seventh place in 2014 and has risen steadily since. Shanghai is home to the world’s busiest container port, which recorded strong growth in 2025, including at the world’s largest automated container terminal.

The opening of Maersk’s flagship logistics centre in Shanghai’s Lin-gang Special Area further strengthened the clusters’ case, as did the launch of The North Bund International Legal Service Port, a new international ship inspection operations team from China Classification Society, and the arrival of representative offices for both the International Chamber of Shipping (ICS) and London P&I Club.

The Index judges shipping centres based on three main weighted criteria: port inputs account for 20% of the total, business services 50%, and general environment inputs — which covers government transparency, customs tariffs, logistics performance, and the extent of e-government and administration — making up the remaining 30% of the score.

The report said Singapore’s grip on the top spot showed no signs of loosening, as container volume growth at its port outpaced Shanghai’s to remain the world’s second-busiest container port. Singapore’s bunkering industry also broke records in 2025 to remain the world’s largest bunkering destination crown with sales of 56.77 million tons. The report noted an increase in LNG deliveries and the issuing of bunkering licenses for methanol and groundwork for future ammonia developments.

Tonnage under the Singapore Registry of Ships rose 27% on-year to 137.46m gt and some 35 companies opened or expanded operations in the city in 2025.

“Singapore’s challenge heading into the latter part of the decade is less about defending its position as a leading shipping hub but about continuing to distinguish itself from other leading maritime cities across Asia. On the evidence of 2025, it is doing exactly that,” said the report.

The only shipping centre to gain two places this year was New York & New Jersey, which the report noted as home of private equity, law firms, brokerage firms, financial institutions and the New York Stock Exchange. The port recorded its third-busiest year ever, and the Xinhua-Baltic analysis highlighted long-term plans at the port, including completion of a harbour deepening project and the signing of two lease extensions of more than 30 years each.

The port’s long-term ambition is clear, as The port’s Master Plan 2050 projects cargo volumes through the port complex could double or triple by the middle of the century.