War with Iran and the Question of America’s Global Power

As the United States–Israel war against Iran enters its third week, the expanding scope of the conflict is forcing the world to reassess the role of the United States in shaping the international order. What began as a military confrontation is increasingly being interpreted as part of a broader geopolitical strategy — one that echoes patterns seen in earlier American interventions.

The latest signal came when the administration of Donald Trump announced a US$10 million bounty for information on Mojtaba Khamenei, Iran’s newly elevated supreme leader. The reward, issued through Washington’s “Rewards for Justice” program, targets individuals whom the United States accuses of involvement in militant activities.

Such a move is unusual in modern diplomacy. Publicly placing a bounty on a serving leader of a sovereign state sends a strong political message and inevitably raises questions about Washington’s long-term objectives in the conflict. Critics argue that the step suggests the war may extend beyond military confrontation and could ultimately aim at weakening or reshaping Iran’s leadership.

The controversy unfolds against the backdrop of intense global criticism of Israel’s conduct in Gaza. The war there has produced devastating humanitarian consequences, with tens of thousands reported dead, many of them civilians. For much of the world, the expansion of conflict toward Iran reinforces the perception that the United States and Israel are pursuing a broader strategic agenda across the Middle East.

Historically, American interventions have frequently been framed in the language of security, democracy, or counter-terrorism. Yet several precedents are often cited by critics as examples where these interventions eventually evolved into attempts to alter political leadership. The invasion of Iraq in 2003, the NATO intervention in Libya in 2011, and sustained political pressure on governments in Venezuela are commonly referenced in this debate.

These precedents also revive a deeper question about the effectiveness of global governance institutions. The United Nations was established after the Second World War to prevent unilateral wars and protect the sovereignty of states. However, the structure of the Security Council — where the United States holds veto power — often limits the organization’s ability to act decisively when Washington itself is directly involved in a conflict.

This structural imbalance has created a persistent credibility dilemma. While the United Nations remains the central forum for international diplomacy, critics increasingly argue that its capacity to restrain the strategic ambitions of major powers remains limited.

As the war with Iran unfolds, the debate is no longer confined to the future of the Middle East alone. It now touches the credibility of the international system itself — and whether the global order is governed by collective rules or ultimately shaped by the interests of its most powerful states.

Trump’s Iran War: Rising Costs and Political Risks

President Donald Trump is confronting growing political pressure after authorizing military strikes against Iran. While the battlefield dynamics appear to favor the combined military strength of the United States and Israel, the more immediate challenge for the White House may lie at home, where the economic consequences of the conflict are beginning to unsettle voters.

The most visible pressure point is energy prices. Tensions around the Strait of Hormuz — a narrow maritime corridor through which nearly one-fifth of the world’s oil supply normally passes — have triggered sharp volatility in global markets. The price of Brent crude oil has climbed above US$100 per barrel, swinging as traders react to shifting signals from the conflict.

American consumers are already feeling the impact. The national average price for gasoline has jumped from about US$2.90 per gallon before the hostilities to around US$3.61. Although Trump has argued that higher oil prices benefit the United States because of its status as a major energy producer, that argument may carry limited political weight at a time when voters remain deeply concerned about inflation and the overall cost of living.

Public skepticism toward the war is also evident in opinion polls. A recent survey conducted by The Economist in partnership with YouGov found that only 39 percent of Americans approve of Trump’s handling of the Iran crisis, while 52 percent disapprove. The absence of a traditional “rally around the flag” effect suggests that the administration has yet to convincingly explain why military force was necessary.

Criticism has emerged even within Republican circles. Former congressman Charlie Dent argues that although the US military has performed effectively, the political and diplomatic case for war was never clearly articulated. Without a compelling strategic narrative, the conflict risks becoming a liability for Republican candidates in the approaching midterm elections.

Supporters of the war, including Senator Lindsey Graham, insist the campaign is degrading Iran’s nuclear and missile capabilities and weakening the government’s ability to project power. Yet the political challenge facing the administration is ultimately a question of time.

As long as tensions threaten energy routes and keep oil markets volatile, inflationary pressures are likely to intensify. Higher fuel and transportation costs could ripple through the broader economy, pushing up prices from farm inputs to supermarket shelves.

Military superiority may secure tactical advantages. Politically, however, prolonged wars often test economic resilience and public patience. For Trump, the decisive arena may ultimately be the domestic economy rather than the battlefield in the Middle East.

PSX benchmark index down 2.3%WoW

Pakistan Stock Exchange (PSX) remained volatile throughout the week, driven by ongoing Middle East military conflict. Overall, the benchmark index declined by 3,630 points or 2.3%WoW to close at 153,866 on Friday, March 13, 2026. Market participation remained moderate during the week, with average daily traded volumes declining to 548 million shares, from 791 million shares in the prior week.

Market began the week on a bearish note on Monday, as oil prices surged by more than 20% in intraday trading, with Brent crossing US$119/bbl in early trading as Iran conflict deepens with traffic halted at Strait of Hormuz. However, market largely recovered in subsequent session as oil prices stabilized after the announcement of release of 400 million bbl of oil from IEA strategic reserves, along with signals of easing sanctions on Russian oil following call between Trump and Putin. Moreover, status quo in the policy rate, with largely unchanged economic projections for inflation, current account, and foreign exchange reserves held by State Bank of Pakistan (SBP), supported investors’ confidence

IMF mission concluded its Pakistan visit for the third review, with end-of-mission statement noting significant progress, while discussions will continue in the coming days, including a more fully assessment of impact of recent global developments.

Economic indicators remained largely positive, with worker remittances remaining strong in February 2026, increasing by 5%YoY to US$3.3 billion.

OMC offtakes increased by 13%YoY, while auto sales continued growth, rising by 42%YoY during the month.

Other major news flow during the week included: 1) Prime Minister Shehbaz Sharif assures Mohammad Bin Salman of full solidarity during Jeddah visit, 2) Pakistan raises US$507 million through 5G spectrum auction, 3) GoP raises petrol and diesel prices, 4) RDA inflows rise 12%MoM and 19%YoY to US$242 million in the previous month, and 5) Foreign exchange reserves held SBP rose US$41 million to US$16.34 billion as of March 06, 2026.

Refinery, Leasing Companies and Jute were amongst the top performing sectors, while Woollen, Paper & Board and Transport were amongst the laggards.

Major selling was recorded by Companies and Foreigners with a net sell of US$16.5 million and US$13.4 million.

Individuals and Banks absorbed most of the selling with a net buy of US$10.8 million and US$11.7 million.

Top performing scrips of the week were: AICL, LOTCHEM, HINOON, PGLC, and YOUW, while laggards included: SAZEW, FCCL, MUREB, GHNI, and DGKC.

AKD Securities anticipates market sentiments to be dictated by developments in the ongoing Middle East conflict. GoP’s efforts to address energy conservation and the ongoing IMF review would also remain key areas of focus.

In the medium term, any de-escalation of Middle East military conflict could trigger a significant market recovery, as the recent correction has made market valuations much more appealing, with forward P/E now at 6.6x.

The brokerage house forecast the benchmark Index to reach 263,800 by end December 2026.

Top picks of AKD Securities include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.

 

Time Is on Iran’s Side

Despite the overwhelming military might of the United States and Israel, time may ultimately favor Iran in the ongoing conflict, as mounting political and economic pressures strain the Trump administration.

Since launching Operation Epic Fury, US forces have reportedly struck some 6,000 Iranian targets, damaging naval vessels, missile launch sites, and other military infrastructure. The US Central Command says more than 90 Iranian vessels have been neutralized. Experts argue that Iran anticipated such attacks and structured its defense around confronting conventionally superior foes.

Analysts note that Iran is deliberately prolonging the conflict, betting it can endure military pressure longer than the US can withstand domestic political fallout. Rising oil prices, disruptions in global energy markets, and attacks on US allies in the Gulf have intensified the economic and diplomatic costs of the war. The closure of the Strait of Hormuz has pushed oil prices near US$100 per barrel, adding further pressure on the global economy.

Military analysts suggest that Iran’s definition of victory is simple - survival. Removing the current leadership in Tehran would require far greater military commitment than the United States has so far deployed. Pentagon officials reported that the war cost over $11.3 billion in just the first six days. The conflict has also taken a human toll - seven American service members have died, and roughly 140 have been wounded.

In his first statement as Iran’s new supreme leader, Mojtaba Khamenei vowed to keep the Strait of Hormuz closed and continue military pressure on regional adversaries. The US is considering naval escorts for oil tankers through the waterway. Analysts warn that as the conflict drags on, rising economic costs, political divisions in Washington, and potential casualties could erode domestic support for what some critics describe as an “optional war.”

While US and Israeli forces dominate tactically, Iran’s endurance strategy could make the political and economic cost of the conflict unsustainable for the United States, leaving the regime in Tehran intact and the strategic balance in the Gulf uncertain.

Quds Day: A Reminder of an Unfinished Question

Few issues in international politics have endured as persistently as the question of Palestine and the future of Jerusalem. Each year, on the last Friday of Ramadan, Muslims across the world observe International Quds Day, a symbolic occasion that seeks to keep global attention focused on one of the most prolonged and emotionally charged conflicts of the modern era.

The observance was initiated in 1979 by Iran’s revolutionary leader Ruhollah Khomeini, who called on Muslims worldwide to dedicate a day to expressing solidarity with the Palestinian people. His objective was simple but strategic - ensure that the Palestinian issue would not fade from international consciousness amid shifting geopolitical priorities.

The word “Quds” is the Arabic name for Jerusalem, a city sacred to Muslims, Christians, and Jews alike. For Muslims in particular, its significance stems from the presence of the Al-Aqsa Mosque, Islam’s third holiest site. Yet the meaning of Quds Day extends far beyond religious symbolism. It reflects a broader political message — that the Palestinian question remains unresolved despite decades of negotiations, conflicts, and diplomatic initiatives.

Over the years, Quds Day has evolved into a global platform marked by rallies, seminars, and public discussions in many countries. Supporters view it as a reminder of the humanitarian and political dimensions of the Palestinian struggle, while also emphasizing the need for justice and self-determination. Critics, however, often interpret the event through the lens of regional politics, arguing that it also reflects Iran’s ideological posture in the Middle East.

Regardless of differing interpretations, the continued observance of Quds Day highlights a simple reality - the Palestinian issue remains central to the political landscape of the Middle East. In an age when global attention shifts rapidly from one crisis to another, the annual commemoration serves as a reminder that lasting stability in the region cannot be achieved without addressing the rights and aspirations of the Palestinian people.

Ultimately, Quds Day is more than a political demonstration or a symbolic gathering. It represents an enduring call for the international community to confront a conflict that continues to shape regional politics and global debate.

 

UAE Cannot Afford Hostility with Iran

For the United Arab Emirates (UAE), prosperity has long depended on one critical asset - stability. As a global hub for trade, tourism, and finance, the Emirates has built its reputation on being a safe and predictable center of commerce in a turbulent region. Yet the intensifying confrontation between Israel and Iran is now testing that carefully cultivated image, placing the UAE in an increasingly uncomfortable strategic position.

In recent years, UAE has sought to deepen diplomatic and economic ties with Israel, hoping to benefit from technological cooperation and expanded trade. While this policy opened new economic avenues, it has also exposed it to the risks of regional polarization. When tensions escalate between Israel and Iran, countries perceived to be aligned with either side inevitably face political and security consequences.

The ripple effects of these tensions are already being felt in the Emirates. The emirate of Dubai—widely regarded as the Gulf’s commercial and financial hub—depends heavily on international investor confidence and a steady flow of tourists. Even limited security incidents or military exchanges in the region can unsettle markets, delay real estate investments, and deter travelers who view the Gulf primarily as a stable destination.

The economic stakes extend far beyond tourism and property markets. The UAE’s energy exports and maritime commerce rely heavily on the strategically vital Strait of Hormuz, through which a significant share of global oil shipments passes each day. Any disruption to this narrow but critical waterway directly affects the functioning of Gulf ports and the broader regional economy.

For a nation that has carefully built its prosperity on logistics, trade, and energy connectivity, prolonged instability in the Strait of Hormuz could prove deeply damaging. Ports cannot operate at full capacity if shipping lanes remain uncertain, and once shaken, investor confidence can take years to rebuild.

Geography offers a clear strategic lesson. Iran is not a distant rival but a powerful neighbor across the Gulf whose influence will remain a permanent feature of regional politics. Sustainable stability in the Gulf therefore requires engagement with regional powers, not merely alignment with distant allies.

Ultimately, the prosperity of the UAE rests on stability, open sea lanes, and investor confidence—assets that cannot survive prolonged regional confrontation. Geography alone dictates that the Emirates and Iran must find a workable coexistence across the Gulf. Strategic pragmatism therefore demands careful diplomacy rather than rigid alignments. If UAE wishes to preserve its role as the region’s premier commercial crossroads, it must prioritize de-escalation and regional balance over geopolitical rivalry.

Who Is Benefiting From War on Iran?

As the conflict involving United States and Israel against Iran intensifies, the humanitarian cost has understandably dominated headlines. Yet wars are rarely judged only by the destruction they cause. Equally important is a harder question: who ultimately benefits from the economic and geopolitical consequences of war?

Daily Brief: PSX and Global Markets

Pakistan’s equity market ended almost flat on Wednesday, while trading in silver contracts remained suspended at the Pakistan Mercantile Exchange (PMEX). Meanwhile, Asian equities declined on Thursday as oil prices surged. Both crude benchmarks jumped about 9%, the safe-haven US dollar hovered near its strongest levels of the year, and gold prices held broadly steady. US stocks also closed lower on Wednesday. To read details click https://shkazmipk.com/capital-market-review-49/

Early estimates suggest Washington may be spending close to a billion dollars a day on military operations. While the figure appears staggering, such expenditures often circulate within the American economy itself. The vast defense ecosystem surrounding the United States Department of Defense thrives during prolonged military engagements. Demand rises for missiles, air defense systems, surveillance equipment and logistical support produced by companies such as Lockheed Martin, Raytheon Technologies, and Northrop Grumman. In that sense, war can act as a powerful economic multiplier for the military-industrial complex.

Energy markets provide another revealing dimension. The Strait of Hormuz, the world’s most critical oil chokepoint, carries nearly one-fifth of global crude supplies. Any disruption or closure immediately pushes oil prices higher. Ironically, such instability may strengthen the position of the United States, which has emerged as one of the world’s leading oil and liquefied natural gas exporters. Higher global prices make American energy exports more profitable while opening opportunities to capture market share in Europe and Asia.

For Gulf producers, the situation is more complex. Countries such as Saudi Arabia, Iraq, United Arab Emirates, and Qatar depend heavily on secure maritime routes to ship oil and gas to global markets. If traffic through the Strait of Hormuz is disrupted, export volumes could decline even while prices surge. In such a scenario, higher prices may not fully offset reduced shipments.

Geopolitical instability may also reinforce the dominance of the United States Dollar in global energy trade. Efforts by emerging economies to establish alternative settlement mechanisms often lose momentum when markets retreat toward the perceived safety of dollar-based transactions.

Meanwhile, elevated oil prices could still deliver additional fiscal space for Mohammed bin Salman, Saudi Arabia’s crown prince, helping finance ambitious transformation initiatives such as NEOM and other development plans.

None of this proves that economic gain is the sole driver of conflict. But history repeatedly shows that wars reshape markets and redistribute advantages. When the guns fall silent, the question will remain: was this merely a geopolitical confrontation, or a conflict whose economic dividends were quietly anticipated from the start?