How Iran is shaping the new navigational order in the Strait of Hormuz?

In a new monthly series on the Seatrade Maritime News Podcast entitled Maritime Crossroads we will be exploring the critical issues of maritime and energy risks in the Middle East region.

The series features Noam Raydan, a Senior Fellow at The Washington Institute for Near East Policy, discussing issues with Marcus Hand, Editor of Seatrade Maritime News.

The first episode explores how Iran is changing the navigational order in one of world’s most key waterways – the Strait of Hormuz.

The internationally recognized routes in the Strait of Hormuz were adopted by International Maritime Organization (IMO) in 1968 but these are no longer being used by commercial shipping.

“Instead, we have a completely new navigational order, and this is what Iran right now wants to shape according to its own terms.

In this new navigational order which we are seeing emerging in the region, we have completely new lanes that are being used by commercial shipping,” she says.

 

Shrinking US aircraft carriers

The glory days of the world’s longest-serving aircraft carrier are over, reflecting fatigue in the broader US fleet amid a decline in the country’s shipbuilding capacity, according to official Chinese military analysts.

In a report on Wednesday, Chinese state broadcaster CCTV said the US Navy’s reliance on extended carrier deployments was a cause for concern, particularly in the case of the USS Nimitz.

The Nimitz was commissioned in 1975, making it the world’s longest-serving aircraft carrier still in active service, and its retirement has been pushed back repeatedly.

According to the US Navy, two aircraft operating from the Nimitz crashed in incidents in the South China Sea in October last year.

“Judging from the series of accidents that have occurred, the Nimitz is already being kept operational with difficulty. The glory days of the Nimitz aircraft carrier are over,” Li Yaqiang, a former senior colonel in the Chinese navy and a military commentator, said in an interview with CCTV.

The carrier was originally scheduled to be retired in 2026, but the US Navy said its decommissioning had been postponed until March next year to align with the expected delivery of the second Ford-class carrier, the USS John F. Kennedy.

“Once the Nimitz retires, any delay to the Ford-class carriers under construction would leave the fleet below the US legal requirement of 11 operational aircraft carriers,” the CCTV report said.

China’s most advanced aircraft carrier, the Fujian, enters service

Since 2006, US law has required that the US Navy’s maritime combat force include no fewer than 11 operational aircraft carriers.

CCTV military commentator Wei Dongxu also told the broadcaster that the US military’s carrier operations continued to be stretched “and it is now at a critical point in the transition between old and new aircraft carriers”.

“The Nimitz is too old and its technical state is no longer reliable enough, so it has to be retired. But the process of bringing the new Ford-class carriers into service has been plagued by problems,” Wei said.

Wei said unresolved problems with the introduction of the new US carriers could mean that the navy’s fleet of 11 aircraft carriers existed “largely on paper”.

“The combat capabilities of the first Ford-class carrier have still not been fully realized, and the F-35C, the important US carrier-borne fighter, has yet to be deployed aboard the ship,” he said.

“This means US carrier deployments must rely on a mix of new and ageing carriers, reducing its advantage at sea.”

Wei also said the problems were largely related to the decline of the US shipbuilding industry since the Cold War.

Extended maintenance cycles for US aircraft carriers are no longer uncommon. In 2017, the USS George Washington entered Newport News Shipbuilding for a planned four-year refuelling and complex overhaul, but it was not returned to the navy until May 2023, or two years after the intended deadline.

Meanwhile, the enormous scale of China’s shipbuilding industry has become a concern in Washington, joining technology, critical minerals and medical supply chains as areas in which US officials fear Beijing has gained a strategic advantage.

A Pentagon report released in December 2024 said the Chinese navy was the world’s largest numerically, with a battle force of more than 370 ships and submarines, including more than 140 major surface combatants. The report projected that the Chinese fleet would grow to 435 ships by 2030.

By comparison, the US Navy had 296 battle-force ships as of September 30, 2024. The fleet was projected to shrink further to 283 ships by 2027 as planned retirements outpaced the commissioning of new vessels.

 

United States the Biggest Arms Seller

Today, I am referring to the second blog US – The biggest Arm Seller I had posted, as a novice, on June 22, 2012. At times I wonder why people are still reading this. Even today it is among the top 20 blogs visited. 

I am one of the millions of people who fail to understand why conflicts are created and allowed to grow that often lead to anarchy, civil war and war among the countries.

If it is not taken as ‘self-praise’, I can see several reasons why a blog written in June 2012 would still attract readers today. Looking at it critically—both its strengths and weaknesses—I think its continued popularity is more about the theme rather than the accuracy of the predictions:

1. It Addresses a Timeless Question

The opening question—why conflicts are created and allowed to grow—remains relevant. Wars, insurgencies, regime changes, and geopolitical rivalries continue to dominate headlines. Readers searching for explanations often gravitate toward articles that challenge official narratives.

2. It Captures a Historical Turning Point

The blog was written during the aftermath of the Arab Spring. Events in Bahrain, Libya, Syria, Afghanistan, Iran, and Pakistan were at the center of global attention. Today, many people revisit early commentary to see who "got it right" and who didn't.

3. The Arms Trade Remains a Hot Topic

My central argument that major powers benefit from arms sales while conflicts continue, still resonates. The world has since witnessed wars in Ukraine, Gaza, Sudan, and elsewhere, with defense spending reaching record levels. Readers often search for critiques of the military-industrial complex, and my title is highly searchable.

4. The Blog Raises Questions Rather Than Giving Definitive Answers

I repeatedly use phrases such as "one of the hypotheses," "one of the conspiracy theories," and "it is believed." This invites readers to think rather than simply accept a conclusion. Such content tends to have a longer shelf life.

My title, "US – The Biggest Arm Seller," contains keywords that people frequently search: 1) US arms sales, 2) biggest arms exporter, 3) Saudi Arabia weapons purchases, 4) Iran conflict, 5) Afghanistan and NATO Even after fourteen years, search engines can continue sending visitors to pages containing evergreen keywords.

I notice three shortcomings:

First, the article relies heavily on speculation without citing sources. Claims about future attacks on Pakistan and Iran, or military hardware being retained for future wars, are presented without evidence, the time proved both correct.

Second, it treats complex events largely through a single lens—great-power manipulation. Local political, ethnic, sectarian, and economic factors receive little attention, these also proved correct.

Third, some predictions did not materialize. Pakistan did not become the next major target after the NATO withdrawal, and several regional developments unfolded differently from what was anticipated.

My overall assessment is, the reason people still read this blog is probably not because every prediction proved correct. Rather, it reflects a persistent skepticism about great-power politics, arms sales, and interventionism.

Many readers continue to ask the same questions today that I raised in 2012. In that sense, the article has aged better as a commentary on geopolitical anxieties than as a forecast of future events.

For a novice blogger in 2012, it also displays something that has remained characteristic of my later writing: challenging dominant narratives and asking uncomfortable questions rather than merely repeating official positions. That is often what keeps an old article alive long after the news cycle has moved on.

Building Stronger and Sovereign Pakistan

As Pakistan celebrates another Independence Day, it is worth reflecting on what sovereignty means in the twenty-first century. It is no longer measured solely by territorial integrity or military capability. A truly sovereign nation is one that is food secure, economically resilient, financially stable and institutionally strong. It protects its borders while creating opportunities for its people, particularly its youth, whose aspirations will shape the country's future.

Pakistan has demonstrated remarkable resilience throughout its history. Despite geopolitical uncertainties, economic pressures and security challenges, the nation has preserved its independence, strengthened its strategic capabilities and developed institutions capable of safeguarding its national interests. These achievements provide a solid foundation for the next stage of national progress.

National security remains indispensable. Pakistan has maintained credible deterrence in a challenging regional environment, ensuring peace through strength. Recent conflicts elsewhere have also underscored an important lesson: military preparedness alone cannot guarantee lasting security. Sustainable national power rests equally on economic vitality, technological advancement, food security and social cohesion.

Pakistan's strategic location offers immense opportunities. Situated at the crossroads of South Asia, Central Asia, the Middle East and China, the country can serve as a vital hub for trade, energy and regional connectivity. Stronger economic cooperation with neighbouring countries, including Afghanistan, Iran and, whenever circumstances permit, India, can unlock new avenues for commerce, investment and shared prosperity.

Energy connectivity remains another strategic opportunity. Projects such as the Iran-Pakistan pipeline and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline have the potential to strengthen Pakistan's energy security while generating transit revenues and promoting regional integration. Advancing such initiatives through constructive diplomacy would contribute to long-term economic stability.

Economic sovereignty is built upon sound fundamentals. Pakistan must continue reducing fiscal and trade imbalances while strengthening public confidence in institutions. Consistent policies, transparent governance and effective implementation are essential to creating an environment where businesses invest with confidence and innovation flourishes.

Food security deserves equal priority. Pakistan possesses fertile land, a hardworking farming community and extensive irrigation infrastructure. Yet recurring shortages of essential commodities highlight the need for modern storage facilities, efficient supply chains and timely policy decisions. Preventing post-harvest losses and improving agricultural productivity will strengthen both national food security and economic stability.

Agriculture as a whole requires renewed attention. Reviving cotton production through high-quality, disease-resistant seed varieties, modern farming practices and greater research support would benefit farmers, strengthen the textile industry and increase export earnings. Likewise, investment in value-added agriculture can transform Pakistan from an exporter of raw commodities into a supplier of high-value products.

Industrial modernization must also become a national priority. Upgrading oil refineries, encouraging technological innovation and expanding manufacturing capacity will reduce import dependence while creating skilled employment. Predictable policies and a stable regulatory environment will encourage both domestic and foreign investment, enabling industries to compete more effectively in global markets.

Pakistan's greatest asset is its people. A young and energetic population, growing digital capabilities, entrepreneurial talent and an expanding technology sector offer tremendous potential. By investing in education, vocational training, research and innovation, Pakistan can build a knowledge-based economy capable of competing in an increasingly technology-driven world.

The country's future prosperity will depend on partnerships between government, private enterprise and academia. Together they can promote productivity, encourage exports, strengthen infrastructure and create employment opportunities for millions of young Pakistanis. Sustainable economic growth will reinforce national resilience and enhance Pakistan's standing in the international community.

As the nation celebrates its independence, the objective should not merely be to preserve sovereignty but to strengthen it. Economic self-reliance, food security, technological advancement, regional connectivity and good governance are not separate goals; together they form the pillars of enduring national strength.

Pakistan has overcome formidable challenges before, and it possesses every ingredient needed to build a more prosperous future. With prudent policies, strong institutions and a shared national purpose, the country can transform its strategic advantages into lasting economic success. That is the path to a stronger, more confident and truly sovereign Pakistan.

*This article was originally published in Pakistan & Gulf Economist

 

 

PSX benchmark index closes almost flat

Pakistan Stock Exchange (PSX) remained under pressure during the week ended on August 13, 2026, primarily due to uncertainty surrounding the US-Iran deal and reopening of Strait of Hormuz. The benchmark index dropped by 1,325 points or 0.7%WoW to close at 180,105 on Thursday. However, market participation improved, with average daily traded volume increasing by 13%WoW to 1.1 billion share.

Oil prices remained elevated. Brent crude crossed US$90/ bbl mark during the week, up from last week’s close of US$84/ bbl, before correcting to current level of US$86/bbl.

Healthy corporate results and positive external and macro developments provided some support to investors’ confidence.

On last Friday, Pakistan signed a mutual defence agreement with Turkiye and Saudi Arabia, extending its earlier pact with the Royal Kingdom.

Fiscal deficit for FY26 was record at a low of 2.6% of GDP, while primary surplus at record high 2.9% of GDP, driven by higher tax revenue and lower markup expenses amid declining interest rates. Consequently, GoP’s debt recorded its lowest annual rise in two decades.

Workers’ remittances increased by 13%YoY to US$3.6 billion during July 2026.

On the sectoral front, auto sales increased by 74%YoY, supported by strong demand.

Other major news flow during the week included: 1) Pakistan to open new gateway for global oil suppliers, 2) FBR hints at withdrawing super tax, 3) Cotton crop satisfactory, rice beats target in Punjab, and 4) Minister calls for auto sector revival to meet US$63 billion export target.

Refinery and Oil & Gas Exploration emerged as top performing sectors, while Power, Fertilizer, and Technology remained laggards.

Major selling was recorded by Banks and Insurance companies with net sell of US$11.2 million and US$6.3 million. Individuals absorbed most of the selling with a net buy of US$16.3 million.

 

Top performing scrips were: CNERGY, PSEL, GAL, GHNI, and ATRL. On the flip side, laggards included: AICL, HUBC, BOP, TRG, and PAKT.

AKD Securities expects the market to improve on strengthening economic indicators amid easing geo political tensions, along with favorable financial results for the period ending June 20, 2026.

Additionally, a potential US-Iran deal could moderate international oil prices towards pre-conflict levels, further supporting sentiment. 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.

The Longer the War, the Weaker America

The bizarre war imposed by the United States and Israel on Iran on February 28 has continued for nearly six months, with no decisive outcome in sight. Pakistan-brokered negotiations have so far failed, largely because the objectives of the two sides appear fundamentally contradictory.

The implicit demand from Washington appears to be nothing short of Iran’s unconditional surrender. Tehran, however, has shown no willingness to capitulate. On the contrary, US efforts to bring Iran to its knees has demonstrated Iranian resilience and have transformed it into an even more formidable regional power.

Iran’s ability to inflict significant losses on US military bases in the Middle East and threaten strategic assets of America’s Arab allies appears to have strengthened with the passage of time. This has potentially altered the regional balance of power.

The Strait of Hormuz has consequently become the most critical pressure point. The US naval blockade and restrictions affecting access to the Red Sea cannot be viewed solely as an attempt to squeeze Iran economically. These also threaten the oil exports of Arab Gulf producers, creating an uncomfortable dilemma for America’s regional partners.

There is another dimension that deserves attention - the survival of US shale-oil producers. A prolonged conflict and the resulting disruption to Middle Eastern oil supplies can keep crude prices elevated. Many high-cost US shale producers could come under severe financial pressure if oil prices fall below around US$65 a barrel. This creates a possible economic incentive for Washington to avoid a rapid de-escalation.

Iran’s latest demands underline the widening gap between the two sides. Tehran has called for an end to the naval blockade, lifting of sanctions, withdrawal of US forces from the region and compensation for war-related losses. At the same time, Washington insists that diplomatic, economic and military pressure will continue until it secures what it considers an acceptable outcome.

But with every passing day, the strategic equation may be shifting: America is exhausting resources while Iran is gaining resilience, experience and leverage.

The greatest loser of this war could ultimately be the superpower itself. Further escalation risks damaging America’s credibility, encouraging Arab partners to reconsider existing security arrangements and intensifying pressure for the withdrawal of US forces from the region.

A superpower does not lose only when it is defeated on the battlefield; it can also lose when the cost of pursuing victory becomes greater than the benefits of achieving it.

PSX benchmark Index closes the week up 3%WoW

Pakistan Stock Exchange (PSX) witnessed positive momentum during this past week. The benchmark Index closed the week up 5,336 points or 3%WoW at 181,430. Market participation remained thin with average daily traded volume falling by 29%WoW to 934 million shares.

This, coupled with Iran-Oman talks aimed at restoring the Strait of Hormuz to its pre-conflict position, drove oil prices below US$80/bbl levels, before settling slightly up at US$82/ bbl on Friday. Moreover, robust financial results from the banking sector bolstered sentiments.

Trade deficit for July 2026 reported at US$3.9 billion remained down 15%MoM led by higher exports. The positive sentiments were partially tempered by uncertainties surrounding the Red Sea passageway, and higher-than-anticipated CPI of 9.2%YoY for the month, although inflation came in single digits after 4 months.

Petroleum offtakes rose 23%YoY for July 2026 to 1.5 million tons as compared to the same period last year due to rains and floods, resulting in a lower base, along with tighter enforcement curbing fuel smuggling from Iran.

Cement sector offtakes grew 6%YoY to 4.5 million tons during the month, supported by improved construction activity.

Other major news flow during the week included: 1) Turkey, Saudi Arabia & Pakistan signed joint defence agreement, 2) OPEC plus raised September oil output by 188,000 bpd, 3) GoP raised PKR882 billion through T-bills auction, 4) GoP also raised PKR474 billion via PIBs sale, and 5) foreign exchange reserves held by State Bank of Pakistan (SBP) rose to US$17.0 billion as of Jul 31, 2026.

Top performing sectors included: Jute, Textile Spinning, and Property, while laggards included: Synthetic & Rayon, Leasing Companies, and Sugar & Allied Industries.

Buying by Mutual Funds amounted to US$13.2 million. Net sellers were Banks with US$11.2 million.

Top performing scrips were: GADT, POWER, CNERGY, NPL, and BOP, while laggards included: MEHT, IBFL, PGLC, KTML, and SHFA.

AKD Securities, expects market to improve on strengthening economic indicators amid easing geopolitical tensions, along with favorable financial results for the quarter ended June26.

Additionally, a po­tential US-Iran deal could moderate international oil prices towards pre-conflict levels, further supporting sentiment. Market continues to trade at attractive valuations.

According to the brokerage house, the benchmark Index is likely 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.

What the US has lost in the War with Iran?

Wars are not won solely on the battlefield. They are also judged by whether they achieve their political objectives, strengthen deterrence and reinforce international credibility. By these measures, the United States appears to have emerged from its confrontation with Iran having paid a price that extends well beyond military expenditure.

The first casualty has been credibility. Washington's messaging shifted repeatedly—from demands for Iran's unconditional surrender to calls for de-escalation and negotiations. Such abrupt changes inevitably raise questions among allies and adversaries alike about the consistency of American strategy. A superpower derives much of its influence from predictability; when its objectives appear to change with circumstances, its deterrent value is diminished.

The second loss is strategic. Modern warfare has demonstrated that overwhelming military superiority does not automatically translate into decisive political success. The US has consumed vast quantities of sophisticated and expensive munitions while confronting an adversary capable of sustaining prolonged resistance through indigenous capabilities and asymmetric tactics. Wars of attrition are rarely favourable to even the strongest military powers if political objectives remain elusive.

Perhaps the most significant consequence has been Iran's enhanced regional standing. Despite facing coordinated military pressure and unprecedented economic sanctions, Tehran has demonstrated resilience that has strengthened its image among supporters and compelled regional actors to reassess its military and political influence. Whether one agrees with Iran's policies or not, its ability to withstand sustained pressure has altered regional perceptions.

The conflict has also exposed shortcomings in the strategic calculations of both Washington and Tel Aviv. Military power can destroy infrastructure, but it cannot easily compel political capitulation. Calls for unconditional surrender proved unrealistic against a state that had prepared for prolonged confrontation. Instead of projecting overwhelming dominance, the campaign underscored the limits of military coercion against a determined regional power.

History offers a consistent lesson: every great power eventually reaches a point where reassessing objectives becomes wiser than escalating a costly conflict. Strategic withdrawal is not necessarily a sign of weakness; it can be an act of prudence when the costs of continuing outweigh the prospects of success. Persisting with a flawed strategy merely compounds political, military and economic losses.

The US still possesses unmatched global military and economic capabilities. However, the Iran conflict serves as a reminder that power alone does not guarantee victory. Credibility, coherent strategy and realistic political objectives remain indispensable. When these are absent, even the world's strongest nation risks emerging from war with diminished influence rather than enhanced authority.

PSX benchmark index up 3.0%WoW

Pakistan Stock Exchange (PSX) witnessed bullish sentiments on Monday and the benchmark index gained 7,241 points, led by a pause in US-Iran strikes, which raised hopes of a diplomatic solution and caused oil prices to fall below US$85/bbl. However, with no lasting resolution during the week, the market remained under pressure over the next three trading sessions, before rebounding on Friday to close the week up 5,073 points or 3.0%WoW at 176,094 points.

Sentiments were further supported by positive June 2026 financial results announced by major companies. Meanwhile, SBP’s status quo in its first FY27 meeting on Monday had little impact on the market, as the decision was largely in line with expectations. Additionally, market participation strengthened, with average daily trading rising by 48.5%WoW to 1.3 billion shares.

On the macroeconomic front, foreign exchange reserves held by SBP decreased to US$17.0 billion as of July 24, 2026. Saudi Arabia also rolled over its US$5 billion deposits for another 3 years, reducing external debt repayments to US$21.5 billion for FY27.

Other major news flow during the week included: 1) ECC approves package of export finance incentives, 2) Dar seeks US partnership to double bilateral trade to US$20 billion, 3) PM Shehbaz Sharif approves amendments to Pakistan Oil Refining Policy, 4) Saudi group eyes US$10 billion investment in Pakistan, and 5) Pakistan, Kuwait agree to expand economic ties.

Active sectors were: Jute, Modarabas, and Refinery, while the lagged included: Close-end Mutual Funds, Miscellaneous, and Textile Weaving.

Major buying was recorded by Mutual Funds of US$14.7 million. While sellers were Individuals with US$11.9 million.

Top performing scrips were: AICL, MLCF, PIBTL, KOHC, and IBFL, while laggards included: HGFA, PIOC, PGLC, YOUW, and TPLRF1.

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

Favorable financial results for the quarter 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.

Formation of Multinational Maritime Defense Alliance

The founding members of the Multinational Maritime Defense Alliance on Thursday approvedthe establishment of the coalition as a framework for maritime defense cooperation, with Saudi Arabia designated as its founding nation, leader and permanent headquarters.

In a joint statement, the founding states said growing threats to global maritime security require stronger collective cooperation to protect freedom of navigation, international trade routes and global energy supply lines through the Bab al-Mandab Strait, the Red Sea and the Gulf of Aden.

The alliance said it will operate in accordance with international law, United Nations conventions and internationally recognized norms to enhance maritime security, safeguard international shipping and protect shared maritime interests.

The participating countries agreed to establish the alliance's Joint Command, command-and-control centers, Joint Maritime Operations Center and General Secretariat in Saudi Arabia as its principal executive bodies.

The statement reaffirmed the founding members' commitment to the purposes and principles of the UN Charter, international law and globally recognized treaties and norms, describing maritime security as a shared responsibility that requires close coordination to address common and transnational threats.

The participating countries said they will continue completing their domestic legal and constitutional procedures to formally accede to the alliance's charter.

Under the agreement, members will expand cooperation in maritime security, intelligence and information sharing, operational planning, joint exercises, training, capacity building, lessons learned and joint maritime operations in accordance with the alliance's charter.

The statement stressed that the alliance is purely defensive in nature and is not directed against any country, alliance or international organization. It said all activities will be conducted in full compliance with international law, respect for state sovereignty and the protection of freedom of navigation, while participation in alliance activities and operations will remain a sovereign decision for each member state.

The founding members also invited other countries that share the alliance's objectives and principles to join the charter, saying broader participation would strengthen collective maritime security in the Bab al-Mandab Strait, the Red Sea and the Gulf of Aden.

The statement described the alliance as a strategic step toward enhancing maritime security, deepening defense cooperation among its members and supporting regional and global stability, while complementing international efforts to preserve international peace and security.

Earlier on Thursday, Saudi Arabia, Kuwait, Bahrain, Qatar, Pakistan, Türkiye, Egypt, Jordan, Yemen, Bangladesh, Nigeria, Sudan, Djibouti and Somalia endorsed the alliance and welcomed agreement on its founding arrangements, while additional countries expressed support and are completing their national procedures before joining the initiative.

Widening War in the Middle East Could Be a Fatal Mistake for the United States

Five months after the United States and Israel launched military operations against Iran, the conflict has outgrown its original battlefield. What began on February 28 has expanded from Iran and Israel to Iraq, Jordan, Egypt and the Strait of Hormuz, raising the risk of a wider regional war with serious global consequences.

The latest escalation underscores this danger. US and Saudi forces jointly struck Iran-aligned groups in eastern Iraq, marking Riyadh's first publicly acknowledged military operation alongside Washington. Iran retaliated by firing missiles at a US base in Jordan and targeting ships in the Strait of Hormuz, the world's most important energy corridor.

Saudi Arabia's subsequent diplomacy is equally telling. After the joint strikes, Defence Minister Prince Khalid bin Salman met US Vice President JD Vance in Washington and reportedly urged the Trump administration not to expand the conflict by attacking Yemen's Houthis or launching further strikes against Iran-backed militias in Iraq. When even America's closest regional ally urges restraint, Washington should take notice.

The conflict is already spreading. A drone strike on a US-owned gas storage tanker at Egypt's Mediterranean port of Damietta highlighted the vulnerability of regional energy infrastructure. Meanwhile, repeated Iranian missile and drone attacks expose the growing limits of American deterrence. According to the Center for Strategic and International Studies, the United States has fewer than 1,000 Patriot and fewer than 250 THAAD interceptor missiles, raising concerns about sustaining a prolonged regional conflict.

The economic risks are equally serious. Any disruption in the Strait of Hormuz threatens global oil and LNG supplies, pushing up freight costs, insurance premiums and energy prices, with inflationary consequences far beyond the Middle East.

President Donald Trump now faces a crucial choice. He can widen the conflict in pursuit of short-term military gains, or recognize that every new front increases the likelihood of a broader and costlier war.

History shows that great powers often falter not because they lack military strength, but because they underestimate the costs of prolonged conflicts. The widening war in the Middle East could become a fatal strategic mistake for the United States. Statesmanship will be measured not by the number of battles fought, but by the wisdom to prevent a wider regional war.

Strait of Hormuz: A Case for Regional Stewardship

The Strait of Hormuz is the world's most critical energy corridor, carrying nearly one-fifth of global oil and liquefied natural gas supplies. Any disruption in this narrow waterway sends shockwaves through energy markets, raises shipping and insurance costs, and threatens global economic stability. A disappointing fact is that due to decades of external military involvement, the Strait has remained vulnerable to recurring crises.

Recent diplomatic developments offer an opportunity to rethink its security architecture. Iranian Foreign Minister Abbas Araghchi has called for closer regional cooperation, while Oman has proposed establishing a joint maritime mechanism involving Iran and the Gulf states. Inspired by the Strait of Malacca, the proposal envisages voluntary contributions from users of the waterway to finance navigation safety, environmental protection, search-and-rescue operations, and maritime coordination.

The Malacca model demonstrates that strategic waterways can be managed effectively through cooperation among the littoral states. A similar arrangement in the Gulf could bring together Iran, Oman, Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, and Iraq in a permanent institutional framework dedicated to ensuring safe and uninterrupted navigation.

Such a mechanism would coordinate vessel traffic, strengthen maritime safety, improve emergency response, protect the marine environment, and establish communication channels to prevent misunderstandings from escalating into conflict. More importantly, it would place responsibility in the hands of those with the greatest stake in preserving regional stability.

The economic case is equally compelling. Every Gulf state depends on secure sea lanes for energy exports, trade, and investment. A stable Strait would reduce insurance premiums, lower transportation costs, strengthen investor confidence, and enhance global energy security.

Regional stewardship should not be viewed as excluding the international community. Freedom of navigation is a shared global interest, and countries benefiting from the Strait can continue supporting its operations through voluntary financial contributions, as they do in the Strait of Malacca. Operational responsibility should rest with the littoral states.

The Strait of Hormuz should become a symbol of cooperation rather than confrontation. By establishing a credible regional maritime framework, Gulf nations can safeguard one of the world's most vital trade routes while demonstrating that regional challenges are best addressed through regional leadership, shared responsibility, and sustained diplomatic engagement.

Pakistan's Western Borders Need More Than Military Vigilance

The recent wave of terrorist attacks in Khyber Pakhtunkhwa and Baluchistan is a sobering reminder that Pakistan's western frontier remains one of the country's most complex and persistent security challenges. Every attack claims precious lives, weakens investors’ confidence, disrupts trade, and raises fresh concerns about regional stability. Yet the real question is not merely who carried out these attacks, but why they continue despite years of counterterrorism operations.

Pakistan shares long and difficult borders with Afghanistan and Iran. Rugged terrain, cross-border tribal linkages, and extensive movement of people and goods make these frontiers among the hardest to secure. Border security is not solely a military responsibility; it also demands effective diplomacy, sound governance, and close regional cooperation.

Pakistani authorities have repeatedly expressed concerns that militant groups exploit territory across the western border to launch attacks inside Pakistan. However, an important distinction must be made. The existence of terrorist sanctuaries does not automatically imply state sponsorship. In many border regions, weak administrative control, porous frontiers, criminal networks, and ungoverned spaces can provide militants with opportunities to operate without necessarily reflecting official government policy. Recognizing this distinction is essential for objective analysis and effective policymaking.

At the same time, neighboring countries also bear an important responsibility. Under international law, every state is expected to ensure that its territory is not used for hostile activities against another country. Effective intelligence sharing, coordinated border management, and timely action against militant networks are therefore indispensable for regional peace and stability.

Another dimension deserves equal attention. Pakistan provides the shortest and most economical land route connecting Afghanistan to the Arabian Sea and has the potential to become a vital gateway for regional trade extending into Central Asia and beyond. Persistent instability along these corridors discourages investment, disrupts commerce, and undermines regional connectivity. It is therefore reasonable to ask who ultimately benefits from keeping Pakistan's western border unstable.

Pakistan's response extends beyond kinetic operations. Military action can eliminate terrorists, but lasting peace requires stronger border management, improved governance in border districts, sustained economic development, effective intelligence, and constructive engagement with both Kabul and Tehran. Pakistan's long-term success will depend not only on eliminating terrorists but also on dismantling the political, financial, logistical, and ideological ecosystem that allows them to recruit, regroup, and strike again.

Time for Riyadh to Reassess Its Security Doctrine

For decades, Arab states have been persuaded that Iran poses the greatest threat to their security. Yet the region is arguably less secure today than at any time in recent history. This paradox deserves serious reflection, particularly in Riyadh.

The "Iran threat" narrative has shaped the Middle East's security architecture for more than four decades. Whether entirely justified or deliberately amplified, it has undeniably served several strategic objectives. It reinforced Arab-Iranian hostility, justified a sustained American military presence across the Gulf Cooperation Council (GCC), generated hundreds of billions of dollars in arms sales, and strengthened Washington's political leverage in the region. It also created an environment that facilitated the Abraham Accords, while discussions on US support for Saudi Arabia's civilian nuclear program have, at various stages, been linked to broader regional political considerations, including normalization with Israel.

Despite these arrangements, the Gulf today faces growing uncertainty. The Gaza war, the prolonged confrontation involving Iran and Israel, recurring tensions in the Strait of Hormuz, and instability around the Red Sea have exposed the vulnerability of the region's energy infrastructure and maritime trade routes. Some regional observers argue that these developments risk undermining the Gulf's position as the world's most dependable energy supplier, regardless of who initiates each crisis.

These realities call for a strategic reassessment. Security partnerships should ultimately be judged not by their longevity, but by their ability to deliver peace, stability and economic security.

The China-brokered rapprochement between Saudi Arabia and Iran demonstrated that diplomacy remains a credible alternative to perpetual confrontation. While the agreement did not eliminate longstanding differences, it showed that dialogue can reduce tensions more effectively than escalating military rivalry. Rather than relying exclusively on traditional security partners, Riyadh could broaden its strategic options by deepening cooperation with Beijing, including in the peaceful development of civilian nuclear technology. Given China's substantial economic interests in Gulf stability and its constructive relations with both Saudi Arabia and Iran, Beijing is well placed to facilitate confidence-building measures and encourage regional de-escalation.

Equally important, GCC states should gradually reduce excessive dependence on external military protection and work toward a regional security framework based on dialogue, mutual respect and shared responsibility. Foreign military partnerships may continue to play an important role, but they should complement—not define—the region's long-term security strategy.

History suggests that lasting peace cannot be achieved through military superiority alone. Sustainable security is built on diplomacy, balanced partnerships and regional ownership of regional challenges. For Saudi Arabia, the question is no longer whether its traditional security doctrine has served the Kingdom well. The more important question is whether that doctrine remains the best guarantee of peace and prosperity in an increasingly multipolar Middle East.

PSX benchmark index declines 2.7%WoW

Pakistan Stock Exchange (PSX) remained under pressure during the week ended on July 24, 2026. The benchmark index declined by 4,782 points or 2.7%WoW to close at 171,021 points. The average daily trading volume also declined by 3.2%WoW to slightly more than 881 million shares.  

As reported my Western media, Yemen's Houthis declared a naval blockade on Saudi Arabia and claimed strikes on two Saudi oil tankers in the Red Sea, putting Bab el-Mandeb flows at risk alongside the existing disruption at the Strait of Hormuz. The US carried out strikes on Iranian military targets on twelfth consecutive night.

Brent peaked above US$101/ bbl before easing to US$97, keeping energy import and inflation concerns at the forefront.

Sentiment found some support from S&P Global upgrade of Pakistan's long-term sovereign credit rating to 'B' with a stable outlook, citing stability and reform implementation.

On the macroeconomic front, yields during the T-Bills auction rose across all tenors.

Banking sector deposits increased 15.2%YoY to PKR40.9 trillion in June 2026.

Urea offtakes rose 2%YoY to 592,000 tons, driven by improving farm economics and availability of subsidies and cheaper financing. As against this, DAP sales declined 58%YoY on higher pricing.

Other major news flow during the week included: 1) Pakistan sought a US$10 billion bilateral exchange stabilization facility from the United States, 2) GoP proposed changes to the Brown field Refining Policy, 3) Pakistan purchased a spot LNG cargo at US$21.88/ mmbtu, the highest since March this year, 4) US unveiled new tariffs on 60 trade partners ranging 10-12% including Pakistan, and 5) OGRA decided to set petroleum prices on daily basis under new pricing mechanism.

Top performing sectors were: Refinery, Insurance, and Textile Spinning, while the lagged included: Jute, Sugar & Allied Industries, and Close-end Mutual Fund.

Major selling was recorded by Mutual Funds and Banks of US$31.0 million, while major buyers were Individuals and Foreigners aggregating to US2$2.5 million.

Company-wise, top performers were: YOUW, CNERYGY, PGLC, ATRL, and NESTLE, while laggards included: SSGC, SNGP, KTML, MLCF, and KOHC.

According to AKD Securities, the US-Iran conflict and international oil prices, along with monetary policy announcement would remain the key focus.

Additionally, favorable financial results for the period ended June 30, 2026 would drive the market sentiments 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.

US-Saudi Nuclear Deal Built on Contradictions

The proposed US-Saudi nuclear deal is being portrayed as a landmark initiative capable of reshaping the Middle East. In reality, it appears to be a proposal burdened with so many political and strategic conditions that its chances of implementation remain slim. It promises much, yet delivers little that Saudi Arabia has sought for years.

The first obstacle is Washington itself. Any agreement of this magnitude must pass the US Senate, where Middle East policy has historically been heavily influenced by pro-Israel interests. It is difficult to envisage congressional approval for any arrangement that Israel believes could narrow its long-standing strategic and technological superiority in the region. Political resistance in Washington, therefore, remains the biggest hurdle.

Even if the agreement survives Congress, its strategic value for Riyadh is questionable. Saudi Arabia has consistently maintained that any civilian nuclear program must eventually include the right to enrich uranium. If enrichment is prohibited, the Kingdom would remain dependent on foreign suppliers for nuclear fuel. Such an arrangement falls well short of the strategic autonomy Riyadh has long pursued.

The proposal becomes even more complicated if it is linked to Saudi recognition of Israel through the Abraham Accords. The Kingdom faces strong domestic, Arab and wider Islamic pressure not to normalize relations with Israel in the absence of a credible and irreversible path toward Palestinian statehood. Without meaningful progress on that front, normalization carries significant political costs for Riyadh.

There is also an economic dimension. Saudi Arabia has invested heavily in the United States over several decades, yet many in Riyadh question whether Washington has fulfilled the security commitments expected from a strategic ally. The muted American response to attacks on Gulf energy infrastructure and its shifting regional priorities have inevitably weakened Saudi confidence in US security guarantees.

Above all, Saudi leaders understand that American policy in the Middle East is inseparable from its commitment to Israel. Whether justified or not, a growing perception across the Arab world is that Israeli security considerations increasingly shape Washington's regional decisions. That perception inevitably influences Saudi strategic calculations.

For these reasons, the proposed US-Saudi nuclear deal looks less like a transformative agreement and more like a diplomatic bargaining chip. It expects Saudi Arabia to make strategic, political and financial concessions while offering neither an independent nuclear capability nor security assurances that Riyadh considers fully credible. Until these fundamental contradictions are addressed, the deal is unlikely to move beyond diplomatic headlines.

Washington Is Not Changing Course - It Is Buying Time

US Secretary of State Marco Rubio's recent statement that Washington remains willing to negotiate with Iran and that "the possibility for diplomacy remains alive" has raised more questions than answers. After nearly two weeks of sustained military operations, the renewed emphasis on diplomacy appears less like a change of policy and more like an attempt to buy time.

Since the ceasefire memorandum signed in April, President Donald Trump's objectives have appeared to shift repeatedly. At different stages, Washington has spoken of containing Iran's nuclear program, weakening its regional influence, pressuring its leadership and demanding broader concessions. These shifting objectives have reinforced the perception that the ultimate goal is Iran's unconditional surrender—an ambition that has proved far more difficult than many in Washington may have anticipated.

Ironically, the prolonged confrontation appears to have strengthened the very adversary it sought to weaken. Rather than triggering internal divisions or regime change, sustained external pressure seems to have fostered greater national unity inside Iran. Many regional analysts now argue that the conflict has elevated Tehran's strategic importance instead of diminishing it, making Iran an even more influential regional actor.

Military history shows that major powers often pause not because they have secured victory, but because they need time to reassess. Reports suggesting heavy expenditure of advanced munitions, the failure to achieve the anticipated regime change, and growing debate among some Gulf Arab states over long-term reliance on US security guarantees all point to an increasingly complex strategic landscape. Against this backdrop, a diplomatic initiative may offer Washington an opportunity to regroup, replenish resources, reassess its options and preserve strategic flexibility without appearing to retreat.

The battle is also being fought in the information domain. Narratives portraying the Houthis as targeting Saudi oil tankers have been questioned by many regional observers, who argue that their operations have primarily focused on vessels linked to Israel. Regardless of which narrative ultimately proves more accurate, the contest to shape international opinion has become almost as important as developments on the battlefield itself.

Whether Washington's latest diplomatic outreach leads to meaningful negotiations or merely marks a tactical pause remains to be seen. What is becoming increasingly evident that military superiority alone has not delivered the political outcome the United States and Israel sought. If diplomacy has returned to center stage, it may not be because Washington has changed course—it may simply be because, in modern conflict, time itself is a strategic weapon.

The Shifting Battle: From Oil to Shipping Corridors

For much of the twentieth century, oil was regarded as the world's most powerful geopolitical weapon. In the twenty-first century, however, control over global shipping corridors may prove equally—if not more—consequential. Whoever can influence the world's maritime chokepoints can shape not only energy supplies but also international trade, supply chains, and economic stability. Against this backdrop, the Red Sea appears to be emerging as the next major strategic battleground.

Following months of disruption around the Strait of Hormuz, growing concerns are now centered on the security of commercial shipping through the Red Sea. Together, the Strait of Hormuz, the Bab el-Mandeb Strait, and the Suez Canal constitute one of the world's most vital maritime corridors, carrying a substantial share of global trade, including oil, liquefied natural gas, manufactured goods, agricultural commodities, and containerized cargo. Any prolonged disruption would ripple across continents through higher freight costs, supply-chain bottlenecks, inflationary pressures, and increased energy prices.

The immediate question is not simply who is attacking commercial vessels, but who stands to gain from sustained instability in these strategic waterways.

Western governments and much of the international media have attributed recent attacks to Yemen's Houthi movement, arguing that the group continues to target maritime traffic as part of its confrontation with Israel and its Western allies. Given the Houthis' own public statements and previous operations, this explanation cannot be dismissed.

Yet geopolitics is rarely straightforward.

Military confrontations are increasingly accompanied by information warfare, where competing narratives emerge almost as rapidly as military events themselves. Some analysts caution against assigning responsibility before credible, independent investigations establish the facts. Premature conclusions can become powerful geopolitical tools, shaping public opinion and diplomatic responses long before evidence is fully examined.

Another line of analysis raises a different possibility. It suggests that if vessels linked to Saudi Arabia increasingly become targets, the objective may extend beyond disrupting commercial shipping. Such incidents could undermine the fragile rapprochement between Riyadh and Tehran, reviving regional rivalries that had begun to ease after years of confrontation. Those who favour a polarized Middle East would clearly benefit from renewed distrust between the region's two most influential powers.

There is also the Israeli dimension. Since the outbreak of the Gaza conflict, the Houthis have repeatedly declared that their maritime campaign is intended to pressure Israel by disrupting shipping linked to Israeli interests. If commercial traffic through the Red Sea becomes increasingly constrained, Israel's trade routes could face significant economic and logistical challenges. However, if the pattern of attacks shifts from Israeli-linked shipping toward Saudi-linked vessels, analysts will inevitably ask whether the conflict is being redirected by actors pursuing broader geopolitical objectives.

History suggests that great powers compete not only for natural resources but also for the routes that transport them. The struggle is no longer confined to controlling oil fields. Increasingly, the ability to influence strategic maritime corridors has become a source of geopolitical leverage. Disrupting a major shipping route can impose economic costs on multiple countries simultaneously without direct military confrontation.

Whether the current tensions represent an extension of the Israel-Houthi conflict, an attempt to derail Saudi-Iranian reconciliation, or a broader contest for influence over global shipping corridors remains an open question. What appears increasingly clear is that in today's interconnected world, strategic power lies not only beneath the ground in oil reserves but also on the sea lanes that connect continents.

The nation—or coalition—that can influence these maritime arteries possesses a powerful instrument of geopolitical leverage. In the twenty-first century, control of shipping corridors may prove even more valuable than control of the cargo itself.

Oil Is No Longer a Weapon

For decades, a major military conflict involving Iran would almost certainly have sent global oil prices soaring. Conventional wisdom held that any disruption in the Persian Gulf would trigger an energy crisis, fuel inflation, and push the world economy toward recession. Yet, nearly five months into the US-Iran war, oil prices have remained relatively stable. This apparent contradiction deserves closer examination.

The foremost reason is that the conflict has not significantly disrupted physical oil supplies. Energy markets react less to military headlines than to actual interruptions in production and transportation. Despite intense hostilities, oil has continued to flow.

The Strait of Hormuz, through which nearly one-fifth of the world's seaborne oil trade passes, remains open. Although shipping costs and insurance premiums have risen, oil tankers continue to transit the waterway. A prolonged blockade would almost certainly have triggered a dramatic spike in crude prices.

Iran has also continued exporting crude oil, primarily to China and, through indirect channels, to other Asian buyers. At the same time, Saudi Arabia, the UAE and other Gulf producers have maintained production, while exports through the Red Sea have largely continued despite heightened security risks.

The global energy landscape has changed fundamentally over the past decade. The United States has emerged as one of the world's largest producers of both crude oil and natural gas, reducing dependence on Middle Eastern supplies. Meanwhile, despite Western sanctions, Russian oil continues to reach international markets through alternative buyers and trading routes, preventing a significant supply shortfall.

Demand-side factors have also played a role. Slower economic growth in China and subdued industrial activity in several major economies have moderated global oil consumption, offsetting much of the upward pressure created by geopolitical tensions.

Perhaps the most important factor is market confidence that none of the principal actors wants to ignite a full-scale energy crisis by destroying vital oil infrastructure or permanently blocking key shipping lanes. Investors have increasingly distinguished between a military conflict and an energy war.

The lesson is unmistakable. The Middle East remains indispensable to global energy security, but today's oil market is more diversified, resilient and interconnected than ever before. As long as production continues, shipping lanes remain open and alternative suppliers keep the market well supplied, oil will struggle to serve as an effective geopolitical weapon. The era when a Middle East conflict automatically plunged the world into an oil crisis may well be coming to an end.

Growing lust for controlling energy routes

The Red Sea is not merely another conflict zone in the Middle East. It has become the latest theatre in an intensifying struggle for control over the world's most critical maritime trade and energy corridors. Following prolonged disruption in the Strait of Hormuz, renewed threats to commercial shipping in the Red Sea suggest that the contest has moved beyond territorial disputes to a broader competition over strategic chokepoints that sustain the global economy.

Much of the international debate remains focused on Yemen's Houthi movement and its attacks on commercial vessels. The Houthis have publicly linked their operations to the Gaza conflict and have demonstrated the capability to target shipping with drones and missiles. Western governments also maintain that Iran provides the group with varying degrees of political, military and technical support. These developments are important, but they do not fully explain the strategic significance of what is unfolding.

The Red Sea and the Strait of Hormuz are connected by more than geography. Together, they form the principal maritime gateway through which a substantial share of Gulf oil, liquefied natural gas and international trade reaches global markets. Disruption at either chokepoint unsettles energy markets. Simultaneous instability at both has the potential to reshape global trade flows, increase transport and insurance costs, fuel inflation and slow economic growth far beyond the Middle East.

This raises an important strategic question: Is the objective simply to disrupt shipping, or to increase the strategic vulnerability of Gulf energy exporters?

Publicly available evidence does not allow a definitive answer. However, it is beyond dispute that prolonged insecurity in these sea lanes weakens the commercial position of Gulf exporters, reduces the attractiveness of the Red Sea–Suez route, and increases dependence on alternative transport corridors. Whether these outcomes are intended or incidental, they carry profound geopolitical consequences.

Modern warfare has evolved. Economic disruption has become a strategic instrument alongside military force. Countries and non-state actors increasingly seek to influence rivals by targeting supply chains, energy infrastructure, financial systems and maritime trade rather than engaging in conventional battlefield confrontations. In this environment, the ability to threaten a strategic waterway may generate political leverage disproportionate to military strength.

Yemen illustrates this reality. A country with limited conventional military power occupies territory overlooking the Bab el-Mandeb Strait, one of the world's most important maritime chokepoints. Geography has given the Houthis an influence extending far beyond Yemen's borders. Their actions demonstrate how relatively inexpensive drones and missiles can compel some of the world's most advanced naval forces to devote enormous resources to protecting commercial shipping.

The question of who benefits also deserves careful examination. The immediate economic losers are evident: Gulf Arab exporters face higher shipping costs and insurance premiums; Egypt risks losing valuable Suez Canal revenue; Europe and Asia confront longer supply routes; global shipping companies absorb higher operating costs; and consumers ultimately pay more. At the same time, prolonged instability can strengthen the strategic position of actors seeking higher energy prices, expanded defence spending, greater geopolitical leverage or a reconfiguration of regional influence. Identifying potential beneficiaries does not establish responsibility, but it is an essential element of serious geopolitical analysis.

The continued vulnerability of commercial shipping despite the deployment of powerful multinational naval forces exposes another important reality. Maritime security in the twenty-first century can no longer be guaranteed solely through conventional naval superiority. Low-cost drones, precision missiles and asymmetric tactics have fundamentally altered the economics of maritime conflict, enabling comparatively weak actors to impose substantial costs on much stronger adversaries.

For policymakers, the central lesson is clear. Viewing the Red Sea crisis solely through the lens of Yemen risks overlooking the larger strategic transformation taking place. Control of maritime chokepoints is becoming one of the defining features of contemporary geopolitics. The competition is no longer confined to territorial boundaries; it increasingly revolves around the ability to influence global commerce, energy supplies and supply chains.

History repeatedly demonstrates that control over trade routes often proves as decisive as victories on the battlefield. From the Strait of Hormuz to the Bab el-Mandeb and the Suez Canal, the struggle for maritime access is shaping the strategic landscape of the twenty-first century. The real question, therefore, is not whether the Red Sea crisis began in Yemen. It is whether the world is witnessing the emergence of a new era in which control of sea lanes becomes the principal instrument of geopolitical power.