Trump Pushing China Towards Confrontation

Just before departing for China, US President Donald Trump imposed another round of sanctions targeting the movement of Iranian oil to China. Officially, Washington presents the move as part of its pressure campaign against Iran. In reality, the sanctions expose a far bigger strategic objective - tightening America’s economic grip around China.

This is not an isolated policy decision. Since returning to power, Trump has aggressively revived tariff wars, expanded restrictions on Chinese technology, intensified pressure on supply chains, and openly challenged Beijing’s growing influence across Asia and the Middle East. The latest sanctions simply add energy security to Washington’s expanding list of pressure tactics.

China’s economic machine depends heavily on uninterrupted energy imports. Iranian crude, often available at discounted prices, has remained an important component of China’s energy strategy despite Western sanctions. By attempting to choke these supplies, Washington is effectively signaling that no sector of the Chinese economy will remain outside the reach of American coercive power.

The message becomes even more provocative when discussions surrounding the Strait of Hormuz are taken into account. Any blockade or disruption in this critical maritime corridor would severely impact Chinese industry, exports, and economic stability. Whether openly stated or not, the strategic implication is unmistakable - the United States is demonstrating its capacity to threaten the economic lifelines of its principal global rival.

Washington may be dangerously misreading Beijing’s patience. Today, China is not a weak, inward-looking economy of the 1990s. It is a global economic giant, a technological competitor, and an emerging military power increasingly unwilling to bow before American pressure. Every new tariff, sanction, or strategic threat deepens Chinese mistrust and accelerates Beijing’s efforts to reduce dependence on Western-controlled financial and trade systems.

From a geopolitical perspective, Trump appears convinced that sustained pressure will force China into strategic compromise. Yet history often produces the opposite result. Major powers rarely surrender under humiliation; they retaliate when they conclude that confrontation has become unavoidable.

The danger is that Washington’s relentless pressure campaign may gradually transform economic rivalry into open geopolitical hostility. If that happens, the consequences will extend far beyond China and America, shaking global trade, energy markets, and already fragile international stability.

From Ultimatums to Outcomes: Reframing Iran Endgame

Donald Trump’s dismissal of Iran’s response as “totally unacceptable” signals a negotiating stance that leaves little room for outcomes. When diplomacy is reduced to demands for capitulation, escalation becomes less a risk and more an inevitability.

The challenge, however, is not just Washington’s posture. Iran, shaped by years of sanctions and strategic isolation, is equally unlikely to yield under pressure. This creates a familiar deadlock—where both sides talk past each other, and the costs are externalized to the region and the global economy.

A more credible pathway lies not in maximalist demands, but in sequenced reciprocity.

First, de-escalation must begin with restoring stability around the Strait of Hormuz. Ensuring uninterrupted maritime flow should be treated as a shared obligation, not a bargaining chip.

Second, sanctions relief should be structured, phased, and conditional—tied to verifiable commitments. This shifts the dynamic from coercion to compliance.

Third, both sides need to acknowledge that absolute victory is neither realistic nor necessary. Strategic restraint often delivers more durable outcomes than rhetorical dominance.

Finally, a framework for post-conflict stabilization—whether through indirect compensation, reconstruction channels, or multilateral engagement—can help rebuild minimal trust without forcing politically unviable concessions.

Diplomacy succeeds not when one side surrenders, but when both sides find a way to step back without losing face. Without that recalibration, the current trajectory risks becoming a prolonged and costly stalemate with no clear exit.

Selective Outrage or Strategic Compulsion?

The ongoing tensions involving Iran, United States, and Israel have once again exposed a troubling inconsistency in the Arab world’s diplomatic posture. While Gulf states react sharply to Iranian retaliation, their silence—or at best, muted response—towards US actions raises uncomfortable questions.

At first glance, this appears as selective outrage. But a deeper probe suggests something more structural. Key players like Saudi Arabia are navigating a narrow corridor shaped by security dependence, economic vulnerability, and regional rivalry. Hosting US military assets and relying on Washington’s security umbrella inevitably constrains their diplomatic choices. Public dissent is costly; alignment, even if reluctant, becomes pragmatic.

Yet, to argue that Arab foreign policy is entirely dictated by Washington would be misleading. The recent thaw between Riyadh and Tehran, alongside growing engagement with China and coordination with Russia on oil policy, indicates an evolving strategic autonomy. These states are no longer passive actors; they are recalibrating within limits.

The real driver, remains regime security and regional balance. For Gulf capitals, Iran is not merely a fellow Muslim state but a strategic competitor with influence across multiple fault lines. This perception shapes responses far more than ideological or religious solidarity, often sidelining platforms like the Organization of Islamic Cooperation into irrelevance.

The result is a policy framework that appears inconsistent but is, in fact, internally coherent. Arab states are neither fully aligned with Washington nor entirely independent of it—they are balancing. The question is not why this duality exists, but how long it can be sustained without eroding credibility in an increasingly polarized region.

UAE and Fractured Middle East

Since endorsing the Abraham Accords, the United Arab Emirates (UAE) has recast itself as a forward-looking state prioritizing economic opportunity over ideological rigidity. Normalization with Israel opened avenues in trade, technology, and finance, but it also stirred unease across sections of the Muslim world, where the move is still viewed as a departure from collective positioning on Palestine.

The discomfort is not merely rhetorical. Within parts of the Arab region, policy circles continue to debate whether such outreach weakens negotiating leverage on longstanding geopolitical disputes. Even in the United States—a principal architect of the accords—analysts have quietly flagged the risks of accelerated realignments that outpace regional stability.

Dubai’s rise as a global financial hub adds complexity to this equation. Increased capital flows, including those linked to Israeli networks, have energized its economy, but they also expose it to heightened scrutiny in an era of sanctions enforcement and financial transparency. Longstanding discussions in compliance circles about the emirate’s role in facilitating trade with Iran further underscore the delicate balance it must maintain.

Recent regional tensions have brought these vulnerabilities into sharper focus. Reports of attacks targeting strategic assets in Dubai—amid conflicting narratives about their origin—highlight a critical reality, economic hubs cannot remain insulated from geopolitical rivalries.

The UAE’s strategy reflects ambition and pragmatism, but also risk. In a region where alliances shift rapidly, economic integration without parallel security insulation may prove a fragile proposition.

PSX benchmark index up 5.0%WoW

Pakistan Stock Exchange (PSX) witnessed bullish momentum during the outgoing week, with the benchmark Index gaining 8,122 points or 5.0%WoW to close at 171,116 on Friday, May 08, 2026. Average daily trading volume decline by 9.7%WoW to 1.1 billion shares.

The dominant sentiment driver was easing of US-Iran tensions, with both sides reportedly edging towards a short-term memorandum to halt the conflict, leading international oil prices to ease by 18%WoW up to US$100.5/ barrel.

Earlier in the week, U.S. President Trump paused the 'Project Freedom' naval operation in the Strait of Hormuz after one day, following a request from Pakistan and other mediating countries, citing progress towards a final agreement with Tehran. Despite an intermittent exchange of fire between U. and Iranian forces near the Strait mid-week, Trump confirmed the ceasefire remained in effect. The IMF Executive Board meeting on Friday was scheduled to consider approval of the US$1.2 billion tranche under the EFF and RSF programs.

Pakistan’s foreign exchange reserves are expected to reach US$17 billion by end June 2026.

Pakistan's trade deficit increased by 4%YoY to US$4.1 billion in April 2026, taking 10MFY26 trade deficit to US$32.0 billion, up 20%YoY.

Cement dispatches rose 11%YoY to 3.9 million tons in April 2026, led by 20%YoY growth in local dispatches.

LSM index rose 11.1%YoY in March 2026, taking 9MFY26 growth to 6.5%YoY.

Foreign exchange reserves held by SBP increased to US$15.85 billion as of April 30.

Other major news flow during the week included: 1) Pakistan to issue US$250 million Panda bonds within 10 days, 2) GoP to end untargeted electricity subsidies, 3) Power consumers to get PKR1.75/ unit relief, 4) Government bars private OMCs from HSD imports, and 5) Pakistan rejects lowest spot LNG bids.

Top performing sectors were: Cement, Technology, and Inv. Companies, while laggards included: Textile Weaving, Leasing Companies, and Synthetic & Rayon.

Major selling was recorded by Insurance and Individuals of US$9.8 million and US$3.7 million respectively. Major buyers were Brokers and Mutual Funds with US$6.1 million and US$4.5 million respectively.

Top performing scrips of the week were: PIOC, JVDC, PIBTL, SSGC, and GADT, while laggards included: INDU, IBFL, MEHT, THALL, and ATRL.

According to AKD Securities, the IMF Executive Board's approval of US$1.2 billion tranche alongside the trajectory of US-Iran negotiations would remain near-term catalysts for market direction, with continued softening of oil prices to act as a supportive trigger.

Market continues to trade at attractive valuations. According to the brokerage house the benchmark Index is anticipated 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.

Decline of rules based maritime market

Assertive America doctrine forms part of a geopolitical mix ushering in an age of extremes for shipping to navigate.

Hellenic Chamber of Shipping board member Yannis Triphyllis initiated a debate between insurers that covered virtually all of the major challenges of the maritime market in the modern age.

In his welcome speech to the Marine Insurance Greece conference in Athens on May 06, Triphyllis claimed that, “Invasion of the Donbas was the starting gun for the unravelling of the rules-based market.”

Key to the discussion was a presentation by COO of the American Club, Daniel Tadros, who laid out the US vision of a new world order, which has the US at the center of the new global economic regime.

Tadros launched into his treatise with a quote from the second world war Admiral Yamamoto, of Japan, speaking after the attack on Pearl Harbour, “I fear that all we have done is to awaken a sleeping giant and fill him with a terrible resolve.”

“Now, fast forward to the last four or five years,” Tadros told the Maritime Insurance Greece audience, “The geopolitical competition with China, both commercially and as a matter of national security, has woken up the United States and has filled not just politicians, both Democrats and Republicans, but also the government, the military, everyone, with a resolve to rebuild the US Merchant Marine.”

Historically the US had been a world leader in shipping, owning 63% of the world’s tonnage, today that was down to less than 1%, the cutting of government subsidies, high labour costs all contributed to the rise of Japanese and South Korean prominence in shipbuilding.

In the last 15 years, China has surged ahead, not just in shipbuilding, which Tadros focused on, but in a number of key industries, including electric vehicles, green energy and through investments across the globe through the Belt and Road.

“The geopolitical competition and national security have created what many have called assertive US maritime trade policies,” said Tadros. The assertive policy can be seen in the tariff regime and other policies that are aimed at levelling US costs with their international competitors.

“In the Western Hemisphere, the United States is looking at combating China's influence, migration, combating cartels, expanding partnerships, and strengthening supply chains, including looking at the Venezuela region.”

The US is combating Chinese influence in Africa, Europe and the Middle East, and Washington is, “working furiously” to reach a peace deal in Ukraine, Tadros said.

According to the assertive America doctrine, a key issue is to avoid conflict between China and Taiwan, and to avoid conflict in the Middle East the US has taken action to remove its main destabilizing forces the Palestinians and the Iranians.

An effect of the assertive America policy was highlighted by George Karkas, MD of Gard Greece, “Developments in the Strait of Hormuz have been quite extraordinary. I actually heard from Mr. Rubio that 10 seafarers died,” in what Karkas said is “one of the most significant disruptions to global trade and energy markets in decades.”

The potential consequences of the disruptions could affect food supplies, energy, and the basic necessities of life for millions of people around the world. Since April, there have been some 20,000 seafarers stranded on between 2,000 and 3,000 ships imprisoned in the Arabian Gulf.

Shipping, as Karkas points out, is a major global success story, “Over time, we have built the framework of rules, standards, practices that work together and have made shipping safer, more efficient, and more accountable. Today, shipping is one of the most internationally governed industries in the world, and this matters. We see fewer lives lost at sea, fewer major casualties, and fewer pollution incidents than at any point in any modern history.”

This framework did not evolve through chance, it happened because it was “rooted” in the work of the United Nations and the IMO, he said. Now we are “entering an age of extremes,” according to Karkas, shifting from a bipolar to a multipolar world “marked by conflict, shifting alliances and fragmentation”.

Karkas showed that the maritime insurance industry has reduced the number of claims — shipping has become a safer industry overall — but that claims over a five-year average are now three times bigger, with the strongest increase in the last 10 years.

“So, we have fewer claims, but when things go wrong, they seem to go very wrong and become very costly. In short, we see far more extreme claims. Why is this happening? The reasons are probably many and complex, but part of the picture is no doubt politics and geopolitics,” said Karkas.

Karkas spoke about the criminalization of crew where nation states are more interested in extracting money than they are in justice for the accused. “If claims and verdicts, become more detached from reality and from the loss actually suffered, they end up undermining trust in the system," he said.

The system is under increasing pressure from risks, including climate change, extreme weather, the shadow fleet, which continues to be a systematic challenge for insurers, and not least the increase of more extreme claims.

Although not directly said by Karkas in his presentation, the global ramifications of the assertive America doctrine are a decay in a system of trust, which ultimately undermines the system as a whole.

Courtesy: Seatrade Maritime News

Significance of Upcoming Trump-Xi Summit

Since former US President Richard Nixon landed in Beijing in 1972 and redefined US-China relations, no countries have done as well as these two. Since then the US has generated more than US$23 trillion in additional GDP, while China lifted 800 million people out of extreme poverty, accounting for three-quarters of all global poverty reduction in the period. 

In 1990, China accounted for just 1.6% of global GDP; today it accounts for nearly 18%, meaning the two together now represent 44% of the world economy, up from 28% when globalization began in earnest.

A dollar invested in the S&P 500 the year Nixon landed in Beijing is worth over US$270 today. China, which had negligible industrial capacity in 1972, now produces more manufactured goods than the next nine countries combined.

This is not to say that the fruits of globalization were enjoyed equally within either economy. The CCP’s cultural genocide of the Uighurs and the slow-motion death of the US industrial heartland are the receipts: ruthless consolidation in China, hollowed-out communities, and rising inequality in America. But this was the deal both sides made.

The US told itself fairy tales about economic liberalization leading to a more democratic China; in fact, both populations simply got significantly richer than the rest of the world. And to quote the bard, therein lies the rub—in a US-China trade war, neither can win against the other. 

Victory in a US-China trade war is a competition about who can lose the least. The true winners are the countries that can stay out of the trade war, a difficult feat in a global economy so dominated by Washington and Beijing.

It’s easy to assign President Trump’s first term as the starting gun of the US-China trade conflict, since he ran on being tough on China back in 2015. But the fight began in 2009 when the Obama administration slapped a 35% tariff on tires from China.

Geopolitical forces were already well at work before Trump and Xi came to power. Trump speed things up, but his pressure was always in service of “the art of the deal.”

Then the pandemic hit. One doesn’t need to be a conspiracy theorist to see that Beijing’s stubbornness made it much harder for the world to control the virus.

The pandemic threw US-China relations off course and likely helped Biden win in 2020—and Biden had no interest in making a deal with China.

Instead, he doubled down on Trump 1.0’s tough talk. Trump 2.0 prefers to pick up where he left off. His administration has threatened, cajoled, and tariffed China to no end, but it was clear even on the campaign trail that President Trump does not ultimately want to fight with China; he wants to deal with China.

In the then-candidate’s own words in August 2024, “If they want to build a plant in Michigan, in Ohio, in South Carolina, they can—using American workers, they can.”

This is one of President Trump’s most maverick policy choices. The US national security establishment and the rest of the “swamp” are China hawks.

They see China as the next great peer competition to US power in the world… and the most serious threat the US has ever faced. In terms of sheer size, power, and wealth, they are correct.

Moreover, the hawks aim to use Trump’s threats, which Trump needs as leverage in his negotiations, to realize their own goals in blocking the rise of Chinese power.

China would also rather avoid a fight—the US is its single largest export market, and exports make up roughly 20% of China’s GDP. When Trump 2.0 tariffs hit in 2025, bilateral trade fell 29%, yet the US remained China’s top export destination.

China produces 28% of global manufactured goods but can’t absorb them domestically, making the US the key buyer keeping its factories running. Still, China is ready to fight if needed, knowing a nationalist dictatorship can weather economic pain better than a liberal democracy.

It is evident that while the US and China have been negotiating, China rolled out new trade rules that lay the legal groundwork for punishing foreign companies that seek to shift their sourcing away from China.

Over the weekend, China told five domestic refiners linked to Iranian oil trade to ignore explicit US sanctions based on a 2021 Chinese law.

 

امریکہ کی شکست کو جیت میں بدلنےکی کوششیں

میرا نکتہ نظر بالکل واضح ہے - امریکہ کو اپنی شکست تسلیم کرنی چاہیے، آبنائے ہرمز کو مکمل طور پر دوبارہ کھولنے کو یقینی بنانا چاہیے، ایران پر عائد اقتصادی پابندیاں واپس لینا چاہیے اور اس جنگ کے دوران ہونے والے نقصانات کی ادائیگی کرنی چاہیے۔ وقت گزر چکا اوراب شکست کو جیت بنا کر پیش کرنے کا کوئ جواز نہیں۔
امریکہ اور ایران کے درمیان جاری مذاکرات سٹریٹجک کامیابی کے بجائے بیانیوں کی شکل اختیار کرتی جا رہی ہے۔ ایران کے علاقائی اثر و رسوخ اور جوہری ترقی کو روکنے کے لیے جو ایک زبردست مہم اسرائیل کے ساتھ مل کرشروع کی گئی تھی اعلان کردہ مقاصد کے حصول میں ناکام ہوچکی ہے۔
یہ کہنا غلط نہیں ہوگا کہ ایران کی علاقائی اہمیت بڑھ گئی ہے، اس کا گفت و شنید کا انداززیادہ مستحکم ہو گیا ہے اور اقتصادی دباؤ کو برداشت کرنے کی اس کی صلاحیت توقعات سے زیادہ مضبوط ثابت ہوئی ہیں۔ امریکہ کی ہٹ دھرمی کی وجہ سےکئی ہفتوں کی ڈپلومیسی کے بعد بھی بنیادی اختلافات حل نہ ہونے کے ساتھ مذاکرات پیش رفت سے بہت دور ہیں۔
آبنائے ہرمز اور ارد گرد کی صورتحال امریکہ کےغلط اندازوں اور ایران کی طاقت کو اجاگر کرتی ہے اور تیل برآمد کرنے والے ملکوں کے امریکہ پرانحصار کوغلط ثابت کرتی ہے۔ امریکہ کی آبنائے کے بندش کی وجہ سے ایک دن میں تقریباً 140 جہازوں کی مومنٹ  بمشکل گنتی کے چند تیل اور ایل این جی کے جہازوں تک محدود ہوچکی ہے۔
نتائج پرہشان کن ہیں۔ تیل برآمد کرنے والی عرب ریاستوں کو آمدنی کی غیر یقینی صورتحال کا سامنا ہے، جب کہ توانائی درآمد کرنے والی معیشتیں افراط زر کے دباؤ اور سپلائی میں رکاوٹوں کا شکار ہیں۔
ان تلخ نتائج کے باوجود واشنگٹن کی زبان ترقی اور مواقع کی بات کرتی نظر آتی ہے۔ یہ حقائق کی عکاسی کم اور اسٹریٹجک ناقص کارکردگی کو سفارتی کامیابی کے طور پر دوبارہ ترتیب دینے کی کوشش ہے۔ یہ ایک ایسی پالیسی کے تصور کو تقویت دیتی ہے جو بغیر کسی ہدف اورمقاصد کے چلائ جارہی ہے۔
بات اب اس نتیجہ پر پہنچ چکی ہے کہ جتنی دیر تک حقیقت کو جھٹلایا جائے گا اتنی ہی زیادہ قیمت دوسروں کو ادا کرنا پڑرہی ہے۔ ساری دنیا خسارے میں ہے سواۓ امریکہ کے

US remains an uninvited guest in Persian Gulf

I am pleased to share one of my blogs posted on May 06, 2020, nearly six years ago, arguing that the United States has no legitimate role in the Persian Gulf and is effectively an “uninvited guest.”

A key theme is historical legitimacy. Iranian officials draw parallels with past foreign powers such as Britain and Portugal, noting that they eventually left the region, implying the United States will also have to withdraw.

The Persian Gulf is framed not only as a strategic waterway but as part of Iran’s identity, with claims that it has been protected by Iranians for thousands of years.

The blog also highlights Iran’s emphasis on military readiness. Rouhani and others stress that Iran’s armed forces—including the Revolutionary Guards, army, and associated units—are fully capable of securing the region.

Iranian officials describe the US presence as a source of instability, tension, and insecurity, insisting that regional security should be handled by neighboring countries.

Overall, the blog reflects a coherent narrative aimed at delegitimizing US presence while asserting Iran’s dominance and responsibility in the Persian Gulf.

To read details please click https://shkazmipk.blogspot.com/2020/05/united-states-uninvited-guest-in.html

Trump’s China Visit Under Scrutiny

Two important questions arise regarding Donald Trump’s proposed visit to China: Is this the right time? And does the United States still retain strategic supremacy over China?

On timing, the moment appears sensitive. Beijing’s concerns have grown in light of tensions surrounding the Strait of Hormuz, a critical artery for global energy flows. Given Iran’s role as a key oil
supplier to China, any perceived threat to Iranian exports naturally raises strategic anxieties in Beijing. As a result, the relationship is no longer confined to trade disputes; it is increasingly shaped by energy security considerations.

The second question—whether the United States continues to enjoy clear supremacy—is more nuanced. Washington may still hold significant military, technological, and financial advantages, the recent developments, including pressures on munitions supplies and a relatively reduced naval presence in the South China Sea, may influence perceptions of its negotiating position. In diplomacy, perception often complements reality.

At the same time, China continues to pursue long-term structural adjustments. Its efforts to promote trade settlement mechanisms beyond the US Dollar reflect a gradual attempt to diversify financial dependencies. While such shifts are unlikely to produce immediate transformation, they do indicate a broader strategic direction.

Market signals, including movements in gold and energy prices, suggest a degree of global uncertainty. However, linking these directly to a decisive shift away from the dollar would require careful qualification, as currency realignments tend to evolve over extended periods.

In sum, the proposed visit may be better understood as a cautious diplomatic engagement rather than a demonstration of dominance. The United States remains a central global power, but its position is increasingly subject to scrutiny. Navigating this evolving landscape will require both restraint and strategic clarity.

Emerging UAE Role in the US–Iran Equation

The proposition that the United States may be quietly positioning the United Arab Emirates (UAE), particularly Dubai—as a forward proxy against Iran is gaining traction, but it demands a measured and fact-driven reading rather than a dramatic conclusion.

The strategic backdrop has undeniably shifted since the Abraham Accords. These agreements did more than normalize UAE-Israel relations; these created a wider geopolitical architecture that strengthened US influence and recalibrated regional alignments vis-à-vis Iran. Analysts increasingly view this framework as part of a broader containment strategy, linking security, trade corridors, and intelligence cooperation.

At the same time, Iran’s perception of the UAE has hardened. The ongoing conflict in 2026 has seen direct strikes, diplomatic downgrades, and rising mistrust, effectively pushing bilateral relations into open hostility. This escalation reinforces the idea that the UAE is no longer a neutral economic intermediary, but an exposed frontline state—whether by choice or circumstance.

Geography amplifies this vulnerability. The narrow Persian Gulf places the UAE within immediate operational range of Iran. While this proximity could, in theory, offer logistical advantages for surveillance or rapid deployment, it simultaneously makes Emirati infrastructure an easy target. Recent attacks on shipping and critical assets in the region underline how quickly economic zones can turn into strategic pressure points.

However, the leap from “strategic partner” to “proxy battlefield” remains analytically weak. Dubai’s role as a global financial and logistics hub imposes hard constraints. Its economic model is built on stability, openness, and investor confidence—factors fundamentally incompatible with sustained military confrontation. Turning such a hub into a Launchpad for ground operations would impose costs far exceeding any tactical gain.

Equally important is the UAE’s own signaling. Despite deepening security ties with Washington, it has publicly resisted the use of its territory for offensive operations and has consistently called for de-escalation. This suggests a calibrated approach: align strategically, but avoid becoming the battlefield.

The more credible interpretation, therefore, lies in the evolving nature of modern conflict. The UAE is emerging not as a warfront, but as a strategic node—facilitating intelligence sharing, surveillance capabilities, and logistical depth within a US-led framework. In contemporary geopolitics, influence is often projected through networks rather than invasions.

In essence, the UAE’s role in the US–Iran equation is expanding, but within limits. It is a partner, a pressure point, and at times a target—but not, at least for now, a chosen battlefield.

SeaLead operated vessel transits through Strait of Hormuz

According to Seatrade Maritimes News, the Antigua-Barbuda flagged container ship Paya Lebar has traded both into and back out of the Arabian Gulf between April 13-28.

The SeaLead Shipping operated and owned Paya Lebar transited westbound through the Strait of Hormuz westbound into the Gulf on April 13 having been at anchor in Nhava Sheva, India since late March.

While in the Gulf the vessel called at Jebel Ali and Khalifa ports in the UAE and Hamad in Qatar.

The Paya Lebar crossed the Strait of Hormuz eastbound on April 29 - passing the approximate location of the US naval blockade in the Arabian Sea as it heads back to Nhava Sheva.

The movements of the Paya Lebar would imply a change in policy by SeaLead which said on March 02 in customer advisory it had halted all transits through the Strait of Hormuz for the safety of its crews, ships, and cargoes.

In July last year the US Office of Foreign Assets Control (OFAC) sanctioned 16 container ships the company had on charter over links with Iran. SeaLead acted to quickly terminate the charters on the 16 vessels and denied it had ties with Iran.

However, in March this year the US Department of Justice filed civil forfeiture complaints seeking to seize US$2.4 million in funds allegedly intended for SeaLead Shipping and its Indian subsidiary, as part of a broader action targeting more than US$15.3 million tied to a sanctions-evasion network linked to Mohammad Hossein Shamkhani, the son of a senior adviser to Iran’s Supreme Leader.

 

 

 

Seven countries agree on oil production adjustment

Seven oil producing countries, part of OPEC Plus announced to implement a production adjustment of 188,000 barrels per day in June 2026, as part of efforts to support global oil market stability.

The countries — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman — held a virtual meeting on Sunday to review market conditions and outlook.

The adjustment is part of the additional voluntary production measures first announced in April 2023. The group said these adjustments could be partially or fully reversed depending on evolving market conditions.

The countries reaffirmed their commitment to maintaining flexibility, noting they may increase, pause, or reverse the phase-out of voluntary cuts, including those introduced in November 2023.

They also stressed the importance of full compliance with the Declaration of Cooperation, with implementation to be monitored by the Joint Ministerial Monitoring Committee (JMMC).

The group confirmed plans to compensate for any overproduction since January 2024 and said the current measure would help accelerate those efforts.

The seven countries will continue to meet monthly to assess market developments, compliance, and compensation progress, with the next meeting scheduled for June 07, 2026.

 

Ground Realities Trump Must Not Ignore

The sooner President Donald Trump understands the realities of war, the better it will be for him.

What began on February 28, 2026, as an unannounced offensive by the United States and Israel against Iran was projected as swift and decisive. Weeks later, despite a fragile truce, the strategic picture tells a different story. The Strait of Hormuz remains effectively constrained, global oil markets are unsettled, and the core objectives of the campaign appear only partially fulfilled.

The most telling gap is between rhetoric and results. Early signals from Washington hinted at regime destabilization in Tehran. Yet Iran’s leadership has adapted rather than collapsed, with continuity preserved at the top. Its nuclear capability, though impacted, is not eliminated. More significantly, Tehran retains its most potent lever—its ability to disrupt global energy flows through the Strait of Hormuz, a chokepoint for roughly one-fifth of the world’s oil supply.

The economic consequences have been immediate and far-reaching. Oil prices have surged, pushing US fuel costs sharply higher and straining global markets. Ironically, some of the worst-affected players are Washington’s own Arab allies, whose economic stability is closely tied to uninterrupted energy flows. A conflict that unsettles allies while failing to decisively weaken the adversary raises uncomfortable strategic questions.

At home, the political costs are mounting. The war has already cost American taxpayers at least US$25 billion, while public opinion has turned increasingly skeptical. A clear majority of Americans now view the conflict as a mistake. Against this backdrop, Trump’s escalating attacks on the media—labeling coverage as “seditious” or hostile—appear less like defiance and more like frustration. When expectations are set high and outcomes fall short, the narrative inevitably shifts.

There is also a historical echo worth noting. During the Vietnam War, early confidence gradually gave way to a recognition of stalemate, amplified by increasingly critical media coverage. While the current conflict is different in scale and context, the emerging pattern—bold claims, limited gains, and rising domestic unease—carries a familiar undertone.

Wars are not won through declarations but through outcomes. Assertions of victory carry little weight when strategic objectives remain elusive and costs continue to rise. The longer this gap between expectation and reality persists, the greater the political and economic toll.

The conclusion is unavoidable: the sooner Donald Trump understands the realities of war, the better it will be for him.

The 700-Million-Barrel Oil Shock

Based on the projection from the Kepler Institute, by the final week of April 2026, the cumulative deficit in oil supply resulting from the closure of the Strait of Hormuz will hit 700 million barrels.

The closure of the Strait of Hormuz has presented the world with one of the most critical oil supply disruptions in modern history and has driven prices sharply upward. Unlike past shocks triggered by wars or embargoes, this blockage strikes at the very jugular of global energy logistics.

According to a fresh assessment by the Kepler Institute, an ongoing halt to oil tanker transit through the Strait of Hormuz until the end of April 2026 could push the global energy market into an extraordinary crisis, bringing the total oil supply deficit caused by this closure to approximately 700 million barrels. This drop in supply has triggered one of the largest oil shocks of the current era. By April 12, around 300 million barrels of oil had been removed from the supply chain due to the stoppage of traffic through this vital chokepoint — a corridor that carries roughly 20% of the world's daily oil demand.

In the wake of this disruption, Brent crude oil prices have surpassed US$100 per barrel, and the cost of refined products such as jet fuel has risen above US$200 per barrel — a scenario that has set off the phenomenon of demand destruction, leading airlines to cancel numerous flight routes, consumer countries to impose fuel rationing and mandatory remote work, and the International Energy Agency to revise downward its 2026 oil demand growth forecast.

Meanwhile, Saudi Arabia, by leveraging the full capacity of its East-West pipeline, and the United Arab Emirates, via the Fujairah export route, are attempting to offset part of the supply shortfall.

Conversely, Iraq has been largely incapacitated, with its exports collapsing from 4 million to less than 900,000 barrels per day. Without immediate diplomatic intervention, smaller Persian Gulf states may soon follow Iraq into paralysis.

Kepler cautions that even if the crisis is resolved immediately, the process of market recovery will not be swift, and the volume of lost oil could reach one billion barrels before the supply chain is fully restored. 

Two potential paths lie ahead for the market. In the favorable scenario, limited demand contraction and a gradual easing of the crisis over the next several weeks are anticipated. However, in the unfavorable scenario, continued disruption into the third quarter of the year could push oil prices toward US$190 per barrel and cause demand destruction on the order of several million barrels per day — an outcome that would be even more severe than the oil crisis of the 1970s. 

 

امریکہ کی افغانستان کے بعد ایران سے بھی شکست

ابھی افغانستان سے شکست کے زخم پوری طرح بھرے نہیں تھے کہ امریکہ کو ایران سے شکست کا صدمہ سہنا پڑھ رہاہے۔ امریکہ اس جنگ میں 25 بلین ڈالرسے زیادہ ڈبونے کے بعد بھی ناکام ہے۔ وہ اب آبناۓ ہرمز کی ناکہ بندی کرکے اپنا تیل اور گیس مہنگی قیمت پر بیچ رہا ہے۔ عربوں کے تیل کی ایکسپورٹ بند ہے اور چین جانے والے تیل کو روکا جارہا ہے۔ وقت نے ثابت کردیا کہ امریکہ کا صرف اور صرف ایک مقصد ہے تیل کی تجارت پر قبضہ۔

PSX benchmark index down 4.5%WoW

Pakistan Stock Exchange (PSX) remained in the grip of bears during the ended on April 30, 206. The benchmark index shed 7,677 points, down 4.5%WoW to close at 162,994 points, with average daily trading volume declining to 1.2 billion shares, down 30%WoW.

The most dominant factor contributing to this decline was the collapse of the Iran-US talks, where the US President cancelled a planned trip of his envoys to Pakistan. Consequently, oil prices remained elevated through the week, with the June’26 Brent contract hitting a high of US$126/ bbl.

Adding to this was decision by State Bank of Pakistan (SBP) to raise the policy rate by 100bps to 11.5% on Monday, the first rate hike in over two and half years.

The prolonged Middle East conflict was termed to be the primary driver for raising the policy rate, attributing inflation to remain above the target range in the next few quarters.

However, a positive development was the confirmation of the IMF Executive Board meeting scheduled for May 08, 2026 to consider approval of the US$1.2 billion tranche under the EFF and RSF programs.

Foreign exchange reserves held by SBP as of April 24, 2026 were reported at US$15.8 billion.

Other major news flow during the week included: 1) Pakistan clears US$3.45 billion loan to UAE, 2) Pakistan plans launch of Panda Bonds, 3) IMF okays 60% cut in gas levy, 4) No let-up in Pakistan’s efforts for US-Iran peace, and 5) Pakistan's weekly oil import bill rises to US$800 million amid US-Iran conflict.

Top performing sectors were: Textile Weaving, Tobacco, and Auto Assemblers, while laggards included: Vanaspati, Property, and Woolen.

Major selling was recorded by Mutual funds, and Brokers amounting to US$28.6 million and US$3.1 million respectively.

Major buyers were Individuals, and Companies with net buy of US$27.4 million and US$1.4 million respectively.

Top performing scrips were: HCAR, MEHT, INDU, PAKT, and MTL, while laggards included: YOUW, NBP, SSOM, GADT, and SSGC.

According to AKD Securities, a constructive resolution of US-Iran would remain the pivotal near-term catalyst for the market direction, with softening of oil prices to act as a trigger. 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.

Power Without Leverage

The rhetoric attributed to Donald Trump—of unilateral victory, a prolonged blockade of the Strait of Hormuz, and forcing Iran into submission—reads less like strategy and more like illusion dressed as resolve.

Start with the claim of “victory.” Wars are not won by declaration. If anything, the gap between stated objectives and actual outcomes after US-Israeli strikes on Iran underscores a harsher truth: overwhelming power no longer guarantees decisive results. The superpower looks less triumphant and more constrained.

The blockade argument is equally flawed. Closing the Strait of Hormuz for months is not a show of strength—it is an invitation to escalation. Iran retains the means to retaliate asymmetrically, while Gulf states would be unwilling passengers in a conflict that directly threatens their economic lifelines. What begins as pressure quickly mutates into regional instability.

Then comes the oil calculus. Squeezing Iranian exports may sound tactically appealing, but it is strategically self-defeating. The immediate consequence would be tighter supply, higher prices, and global economic stress. Washington’s Arab partners, far from benefiting, would absorb the shock. Punishing Iran ends up punishing the system.

Most unrealistic, however, is the expectation of Iran’s unconditional surrender. Tehran’s track record suggests the opposite: pressure entrenches resistance. Escalation does not compel compliance; it erodes space for negotiation.

The underlying problem is not intent but misreading leverage. Coercion without credible endgames risks exposing limits rather than enforcing outcomes. Each additional threat weakens, rather than strengthens, the credibility of US strategy.

A sustainable path demands restraint, not bravado—consolidating ceasefire arrangements, reopening diplomatic channels, and allowing all sides a face-saving exit. Power, when detached from realism, ceases to be power at all; it becomes noise with consequences.

Is UAE Risking Its Oil Exports by Leaving OPEC?

The reported move by the United Arab Emirates (UAE) to step away from OPEC signals a structural shift in global oil dynamics rather than a simple policy adjustment. The key question is whether this decision strengthens export potential or exposes the UAE to new risks.

At the core of the issue is production capacity. The UAE has invested heavily over the past decade, raising its installed capacity to nearly 5 million barrels per day, while its output quota under OPEC+ remained significantly lower, around 3–3.5 million barrels per day. This gap created sustained frustration in Abu Dhabi, where policymakers argue that constrained quotas prevent optimal monetization of long-term investments.

By exiting the OPEC framework, the UAE gains theoretical freedom to increase production and exports toward its full capacity. In normal market conditions, this would enhance revenue potential and strengthen its position as a flexible supplier. However, oil markets rarely operate in isolation from geopolitics.

Recent regional instability linked to tensions involving Iran has already demonstrated how quickly export routes through the Strait of Hormuz can be disrupted. Even without OPEC constraints, physical and security risks can limit actual export volumes. In such an environment, higher capacity does not automatically translate into higher realized exports.

The role of Saudi Arabia also remains central. Saudi Arabia has historically anchored OPEC’s production discipline to stabilize prices. A UAE exit weakens this coordinated structure and raises the possibility of more competitive output strategies among major producers. While this may benefit short-term volume expansion, it can also pressure global prices, ultimately reducing export revenue gains.

In the short term, the UAE’s export position is unlikely to change dramatically due to existing logistical and geopolitical constraints. Over the medium term, however, it gains greater autonomy to align production with market demand rather than quota allocation.

The outcome, therefore, is balanced but conditional. The UAE is not simply risking exports; it is trading coordinated stability for operational flexibility. Whether this proves advantageous will depend on how effectively it manages production discipline in an increasingly fragmented oil market.

The Shrinking Leverage of the United States

The visible frustration of Donald Trump over Iran’s negotiating posture is not merely diplomatic theatre—it is a signal of eroding leverage. What Washington presents as firmness increasingly looks like an inability to recalibrate.

The demand for unconditional concessions from Iran rests on a premise that no longer aligns with ground realities. Power, in this case, is not defined by military capability alone, but by the ability to translate pressure into outcomes. By that measure, the United States is struggling.

This conflict has exposed three uncomfortable truths. First, the United States chose to act without consolidating traditional alliances, thereby limiting both legitimacy and strategic depth. Second, its objectives remain ambiguous and unmet—maximum pressure has not yielded maximum compliance. Third, anticipated economic triggers, particularly in global energy markets, have failed to materialize in Washington’s favor.

More consequentially, Iran has demonstrated a capacity to absorb, adapt, and retaliate in calibrated ways. The costs, meanwhile, have spilled across the region - disrupted Gulf exports, strain on Qatar’s LNG infrastructure, and a dent in the UAE’s economic momentum. These are not peripheral effects—they redefine the strategic environment.

Having exited the Joint Comprehensive Plan of Action negotiated under Barack Obama, Washington now operates without the diplomatic continuity it once discarded. Escalation remains an option, but increasingly an expensive one with diminishing returns.

Here the real disagreement begins. The prevailing narrative still assumes that time favors the United States. Evidence suggests otherwise. Prolonged pressure, instead of breaking Iran, may be normalizing its resistance.

This is not a call for capitulation—it is a recognition of limits. The United States may still possess overwhelming power, but it no longer commands automatic outcomes. Accepting that reality is not weakness; refusing to do so may prove strategically costlier.