Hormuz Security: Responsibility and Compensation Must Go Together

The decision by Britain and France to lead a multinational military mission to secure navigation through the Strait of Hormuz deserves careful scrutiny. While the initiative is being presented as an effort to protect freedom of navigation, it raises a more fundamental question, why should extra-regional powers assume responsibility for a waterway that lies between Iran and Oman?

The Strait of Hormuz is one of the world's most strategically important maritime passages. A substantial portion of global energy supplies and commercial cargo passes through it every day. Ensuring its safety is therefore essential, but geography cannot be ignored. Iran and Oman are the two littoral states that share the Strait. They have the greatest stake in maintaining peace, stability and uninterrupted maritime traffic.

Iran has consistently maintained that the security of the Strait should remain the responsibility of the countries bordering it. That position deserves serious consideration. History has shown that the involvement of outside military powers often complicates regional disputes instead of resolving them. The deployment of multinational naval forces may appear reassuring to some, but it can also intensify strategic competition and increase the risk of confrontation.

It is also difficult to believe that Britain and France are acting entirely on their own. Their initiative appears to reflect a broader Western security strategy in which the United States prefers to remain in the background while its closest allies take the lead. Whether this perception is accurate or not, it is one that many countries in the region are likely to share.

If Iran and Oman are expected to shoulder the responsibility of safeguarding one of the world's busiest maritime corridors, then responsibility and compensation should go hand in hand. Maintaining maritime surveillance, search-and-rescue services, navigation support and security infrastructure requires significant financial resources.

It is therefore reasonable to argue that Iran and Oman should be entitled to levy a regulated transit toll on commercial vessels using the Strait to recover the cost of providing this essential international service.

The Strait of Hormuz belongs to its geography before it belongs to global geopolitics. Lasting maritime security will be achieved not through the presence of foreign warships, but by recognizing the primary responsibility—and the corresponding rights—of Iran and Oman.

The United States at 250: A Taxpayer's Unasked Question

The United States is celebrating the 250th anniversary of its independence. There will be fireworks, parades and speeches praising democracy, liberty and the Constitution. Political leaders will applaud the resilience of American institutions, while corporations will showcase their contributions to innovation, philanthropy and corporate social responsibility.

These celebrations are well deserved. The United States has given the world remarkable scientific discoveries, technological breakthroughs and an economic model that continues to inspire millions.

Yet amid the celebrations, one question is unlikely to be asked.

How closely do the taxpayers examine the way their tax dollars are spent beyond their own borders?

The United States devotes an extraordinary share of public resources to defence and national security. Every military deployment, overseas base, weapons package and security commitment begins with a tax dollar earned by a US worker or business. Governments justify such spending as essential to protecting national interests and maintaining international stability.

Critics argue that some foreign interventions and prolonged military engagements have instead contributed to instability and imposed heavy human and financial costs.

Reasonable people may disagree over these competing views. What should not be disputed, however, is the taxpayer's right to ask questions.

In every democracy, taxpayers are more than a source of government revenue; they are stakeholders in national policy. They have every right to demand transparency, accountability and measurable outcomes whenever vast sums of public money are committed abroad.

If corporations are expected to explain how they spend shareholders' money, governments should be equally prepared to explain how they spend taxpayers' money.

The strength of the United States has never rested solely on its military power. It has also rested on the confidence of its citizens that public institutions remain accountable to the people they serve.

As the United States enters its next quarter millennium, perhaps the most meaningful expression of patriotism is not louder celebration, but deeper scrutiny. Democracies flourish not when citizens applaud every decision of their governments, but when they ask whether every tax dollar reflects the values, priorities and aspirations of the people who earned it.

PSX benchmark index up 3.2%WoW

Pakistan Stock Exchange (PSX) witnessed positive momentum during the week ended on July 03, 2026. The improved outlook led to a strong rally in Banks. During the week the benchmark index gained 5,801 points and closed the week at 185,372 points, up 3.2%WoW. Despite a positive week, market participation measured by average daily traded volume declined by 32.5%WoW to 1.0 billion shares.

Market witnessed positive momentum, driven by lower-than expected inflation of 11.07%YoY in June 2026, as full year CPI remained in single digits at 7.05%YoY in FY26. This fueled sentiment around a potential policy rate cut later in the year as expectations for FY27 inflation remain subdued.

The aforementioned inflation also led to a decline in yields for 2, 3, 5, and 10-year tenors in Thursday’s PIB auction.

Positive talks in Doha between the US and Iran led to improved traffic in the Strait of Hormuz, though still below pre-war levels, bringing Brent near US$70/ bbl, further supporting investor confidence.

On the macroeconomic front, trade deficit rose to US$39.5 billion for FY26, up 22%YoY, as higher oil prices weighed on imports.

Foreign exchange reserves held by Pakistan at close of the fiscal year were reported at US$18.4 billion, marking a record high year-end level.

OMC sales declined marginally by 1%YoY in FY26 to 16,190,000 tons, led by higher oil prices.

Other major news flow during the week included: 1) Pakistan debt upgraded to ‘overweight’ by Barclays, 2) FBR achieved the revised tax collection target of PKR12,957 billion for FY26, 3) Middle East producers push on with oil/ LNG loadings despite ship attacks, 4) Pakistan eyes formal energy trade with Tehran, and 5) Pakistan and US discussed maritime cooperation.

Top performing sectors were: Jute, Sugar & Allied Industries, and Synthetic & Rayon, while laggards included: Textile Spinning, Leather & Tanneries, and Exchange Traded Funds.

Major buying was recorded by Mutual Funds and Companies of US$23.5 million and US$6.6 million, respectively. Major sellers were Insurance US$20.9 million and Individuals US$4.8 million.

Top performing scrips were: IBFL, TPLRF1, PTC, UBL, and JVDC, while laggards included: KEL, SRVI, MEHT, PABC, and SNGP.

According to AKD Securities, progress on US-Iran deal, 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.

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

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

Restraint at Iran's Defining Moment

As Iran prepares to bid farewell to its Supreme Leader, regional stability depends less on military strength than on strategic patience. For all parties, this is a moment when restraint can prevent miscalculation and preserve the prospects for peace.

The funeral of Iran's Supreme Leader will be far more than a religious ceremony. It will mark one of the most consequential political events in the country's contemporary history. Millions of mourners are expected to gather, while Iran's political, military, and religious leadership is likely to be present. Such an unprecedented congregation presents extraordinary security challenges.

The delay in the burial has prompted widespread speculation. Although Iranian authorities have not officially explained the postponement, many analysts believe it reflects the enormous responsibility of ensuring the safety of both the public and the country's top leadership. Given the prevailing regional tensions, Iran's security establishment is unlikely to leave anything to chance.

One factor that cannot be overlooked is the current geopolitical environment. Following months of military confrontation, covert operations, and escalating rhetoric, Iranian authorities are bound to prepare for every conceivable contingency. Even in the absence of credible evidence of an imminent attack, prudent security planning requires assessing worst-case scenarios. In today's Middle East, perceptions can be as influential as realities.

Historical experience also weighs heavily on Iranian planners. The funeral of Imam Khomeini remains etched in the nation's collective memory after massive crowds created chaos and endangered countless lives. No responsible government would wish to witness a repeat of such scenes, particularly when today's security environment is considerably more volatile than it was decades ago.

This is precisely why Israel and the United States should exercise maximum restraint during this sensitive period. There is no public evidence that either country intends to undertake military action during the funeral. Nevertheless, wisdom dictates avoiding any action that could be perceived as provocative. Military movements, heightened aerial activity, or any unexpected incident could easily be misinterpreted, increasing the risk of an unintended confrontation.

Beyond the strategic risks lies an even greater humanitarian concern. Any confrontation during an event attended by millions of civilians could have catastrophic consequences. The resulting loss of innocent lives would inflame public opinion across the Middle East, deepen regional instability, and further diminish the already fragile prospects for diplomacy.

Strategically, restraint serves the interests of all parties. Allowing Iran to conduct this solemn national event without fear of external interference would reduce the likelihood of miscalculation, deny extremists an opportunity to exploit heightened emotions, and demonstrate that even bitter adversaries recognize certain humanitarian and political boundaries.

The Middle East has endured decades of conflict, retaliation, and strategic misjudgments. The region does not need another crisis born of misunderstanding at one of its most emotionally charged moments. History repeatedly shows that wars are not always the result of deliberate decisions; they often begin with miscalculations, false alarms, and failures of communication.

Iran's leadership transition will undoubtedly shape the region's future. How its adversaries conduct themselves during this period will also be remembered. Strategic restraint should not be mistaken for weakness; on the contrary, it reflects confidence, maturity, and an understanding of the grave consequences of unnecessary escalation.

The funeral of a national leader should remain a moment of mourning, reflection, and orderly transition—not a stage for geopolitical brinkmanship. At this defining moment, the strongest message any nation can send is not through force, but through restraint.

US Military Bases: Security Shield or Regional Liability

For decades, the presence of United States military bases in the Gulf has been presented as a cornerstone of regional security. However, the recent escalation between the United States and Iran has raised a fundamental question for Arab countries hosting these installations - do these bases continue to provide security, or have these become a source of strategic vulnerability?

In any direct confrontation between Washington and Tehran, Gulf states risk becoming exposed to consequences of decisions they did not make. When US forces strike Iranian targets, retaliation can extend to American military facilities located in neighbouring Arab countries, placing their territory, infrastructure, and economies at risk.

The economic impact is equally significant. Gulf economies depend on uninterrupted energy exports, maritime trade, and investor confidence. Any disruption in the Strait of Hormuz immediately affects national revenues and global markets. Countries hosting foreign military bases therefore face a difficult reality - they bear the costs of conflicts shaped by external strategic calculations.

The original purpose of these bases was deterrence and protection. Yet changing regional dynamics require a reassessment of whether the existing security framework continues to serve Gulf interests. A military presence designed to prevent instability may, under certain circumstances, become a factor that increases the risk of escalation.

Though, a tough decision, it demands an immediate end to all foreign military cooperation. The GCC states have to ensure that their territories are not used for offensive operations that could invite retaliation and undermine their economic security.

The Gulf region today is far different from the era when external powers largely defined its security arrangements. GCC countries possess greater economic influence, diplomatic capacity, and strategic importance. This may be the time to explore a more balanced security architecture based on regional stability, dialogue, and greater strategic autonomy.

The Strait of Hormuz crisis has highlighted a broader reality - lasting security cannot depend only on military deployments. It requires reducing the risk of confrontation and ensuring that Gulf states are not trapped between competing powers.

The question facing GCC countries is therefore not simply who provides security, but whether the current model truly protects their long-term interests.

Who Will Control Strait of Hormuz?

The debate over the future control of the Strait of Hormuz has moved beyond naval deployments and freedom of navigation. It has become a question of sovereignty, regional power balance, and who will shape the security architecture of one of the world’s most important maritime corridors.

The basic question is straightforward: who will provide security to ships and their crews, and in return, who will collect charges for ensuring safe passage? Geographically, the Strait lies between Iran and Oman, making these two coastal states the natural stakeholders in any future arrangement.

For decades, the Gulf security framework was built around a strong American military presence. The United States played a major role in protecting maritime routes and reassuring regional allies. However, the geopolitical landscape has changed. Past arrangements no longer fully reflect current realities.

Iran, despite years of sanctions and pressure, has emerged as a major regional power with significant influence over Gulf security dynamics. Its location at the Strait of Hormuz provides it with a strategic position that cannot be ignored. Any future framework governing the waterway will have to acknowledge Iran’s role as a neighbouring coastal state.

At the same time, Arab states are reassessing the assumption that their long-term security can depend entirely on external guarantees. The perception that Washington’s regional priorities are closely linked with Israel’s security interests has encouraged some Gulf countries to reconsider the balance between strategic partnerships and regional self-reliance.

This does not mean that the United States has lost its influence in the Gulf. Its military presence, diplomatic reach, and economic relationships remain significant. However, influence is different from ownership. A foreign security role does not automatically translate into authority over a waterway located within the jurisdiction of coastal states.

The discussion over Iran’s proposed transit charge — reportedly around one dollar per barrel — highlights the larger issue. Financially, such a fee may appear limited when compared with global oil prices. The real significance is political: accepting such an arrangement would symbolize recognition of a greater regional role for Iran.

The Strait of Hormuz carries a substantial share of global energy supplies. Any disruption affects oil, gas, fertilizer, food costs, and global inflation. Therefore, the world has a direct interest in stability and predictable rules.

The future of Hormuz may not be determined only by military strength. It will depend on whether a new regional understanding emerges — one that balances international navigation rights with the legitimate interests of countries bordering the Strait.

The central question is no longer whether Iran and Oman have influence over Hormuz. They already do. The real question is whether the world is prepared for a new security arrangement where regional powers play a greater role in managing regional affairs.

Pak-Iran energy cooperation: Geopolitics Limits Economic Choices

For decades, Pakistan has relied on imported energy to meet its growing requirements. Crude oil, refined petroleum products and LNG have largely come from Saudi Arabia, Kuwait and Qatar, creating deep economic and strategic linkages with the Gulf region.

However, Pakistan’s energy map has also been shaped by geopolitical realities. Energy cooperation with Iran has remained limited, largely due to international sanctions on Tehran, particularly those imposed by the United States. The Iran-Pakistan gas pipeline remains one of the clearest examples of how strategic considerations can override economic logic.

At a time when Pakistan faces persistent energy shortages, high import costs and pressure on foreign exchange reserves, the question of affordable and diversified energy supplies has become increasingly important. Yet, despite recent improvement in Pakistan-US relations and public expressions of cooperation from both sides, the sensitive issue of Iranian energy imports remains largely absent from the discussion.

Pakistan also faces potential financial consequences linked to delays in implementing the Iran-Pakistan gas pipeline agreement. This highlights a broader dilemma: whether Pakistan’s energy decisions are being driven primarily by economic necessity or constrained by a larger geopolitical environment.

Iran, as a neighbouring country with significant energy resources, could theoretically provide Pakistan with another supply option. Any such engagement, however, would require Islamabad to carefully balance relations with Washington and its longstanding partnerships with key Gulf energy suppliers.

The issue is not simply about choosing one partner over another. Pakistan’s challenge is that energy security, diplomacy and global power politics are now deeply interconnected. In an ideal economic environment, the cheapest and most reliable energy source would naturally attract demand. In reality, international relations often influence commercial decisions.

This has led some analysts to question whether Pakistan has sufficient strategic space to pursue every economically attractive opportunity, including potential energy cooperation with Iran.

For Pakistan, the long-term objective must be an energy policy that maximizes national interest while managing external sensitivities. A country with growing economic ambitions cannot afford energy insecurity, but it must also navigate the complex realities of global alliances.

The emerging debate is therefore not only about Iran, sanctions or pipelines. It is about whether Pakistan can build an energy strategy where economic priorities and geopolitical realities find a workable balance.