Louder Rhetoric, Diminishing Credibility

The United States Central Command (CENTCOM) has claimed that its latest military campaign struck nearly 140 targets in Iran—far exceeding the scale of its previous rounds of attacks. Whether this figure is accurate or not is almost secondary. More important is the strategic narrative such claims are designed to create and the political objectives they may serve.

One emerging perception is that the conflict is no longer confined to military confrontation. It has evolved into a struggle over energy markets, regional influence, and financial leverage. Continued instability in the Gulf discourages investment, disrupts confidence, and keeps a strategic premium on energy supplies. Critics argue that prolonged tension can also benefit major energy exporters outside the region by sustaining higher oil and gas prices.

A second perception is that repeated references to Iranian attacks on American military facilities reinforce the argument for maintaining an extensive US military presence across the Gulf. From this perspective, every escalation strengthens the case that these bases remain indispensable for the security of America's Arab partners, even though their continued presence itself remains a subject of debate.

There are also wider economic considerations. Analysts have suggested that continued hostilities delay any possibility of normalizing Iran's oil exports, resolving disputes over frozen Iranian assets, or addressing future claims for compensation arising from wartime destruction. As long as the conflict persists, diplomacy inevitably takes a back seat to military calculations.

Perhaps the greatest casualty, however, is credibility. In modern warfare, information has become as powerful as missiles. Every claim of battlefield success is instantly challenged by satellite imagery, independent analysts, and social media. Governments no longer enjoy an uncontested monopoly over the narrative. If official statements are perceived to exaggerate military achievements or downplay setbacks, public trust erodes rapidly.

History reminds us that wars are fought not only on the battlefield but also in the realm of perception. Military victories may shape today's headlines, but credibility determines tomorrow's legitimacy. In an age of instant information, winning the narrative may ultimately prove more difficult—and more important—than winning the war itself.

Who Is the Terrorist? The United States or Iran

"Terrorist" is perhaps the most powerful label in modern geopolitics. Once attached to a country, organization or individual, it often becomes sufficient to justify sanctions, military intervention and even targeted killings. Yet a fundamental question remains unanswered: Who decides what constitutes terrorism, and are the same standards applied to everyone?

The continuing confrontation between the United States plus Israel and Iran exposes this dilemma. Although, a ceasefire was announced in April, military exchanges have continued, with each side accusing the other of violating the agreement. Amid the exchange of accusations, an uncomfortable reality has emerged—the principles of international law appear to change depending on who is using force.

The United States and Israel have defended targeted strikes against senior Iranian military commanders and political leaders as legitimate acts of self-defense. Their critics argue that these operations amount to political assassinations carried out without judicial process and in violation of international law.

The disagreement is not merely legal; it goes to the heart of how the international community defines legitimate use of force.

Similarly, Iran has maintained that military bases used to launch attacks against its territory become lawful military targets, regardless of where they are located. Arab governments, understandably, fear that such retaliation could draw the entire region into a wider conflict. At the same time, competing media narratives often shape public perception more effectively than independently verified facts.

The latest allegation that Iran seeks to assassinate US President Donald Trump has further intensified tensions. If such a plot exists, it deserves unequivocal condemnation. However, it also raises a difficult question. If the targeted killing of foreign leaders or senior officials can be justified as self-defense when undertaken by one state, on what legal or moral basis should similar conduct be judged differently when attributed to another?

This is not an argument in favor of political assassination by any nation. Rather, it is a call for consistency. International law cannot retain credibility if identical actions are described as "self-defense" when committed by allies and "terrorism" when attributed to their adversaries.

The real question, therefore, is not simply who the terrorist is. The more important question is whether the world is prepared to uphold one universal standard of justice—or continue living with two.

 

At PSX volatility spikes daily trading 25.7%WoW

Pakistan Stock Exchange (PSX) remained volatile during the outgoing week driven by uncertainties surrounding the US-Iran conflict, pushing oil prices to US$80/ bbl before retreating. The benchmark index declined 4,626 points decline on Wednesday, but recovered partially on Friday. The index closed the week at 182,242 points, down 3,130 points or 1.7%WoW. Market activity remained strong, with average daily trading volume up 25.7%WoW to 1.3 billion shares.

On the macroeconomic front, worker remittances for June 2026 increased by 2%YoY to US$3.5 billion, taking FY26 total to a record high of US$41.6 billion, up 9%YoY.

Foreign exchange reserves held by State Bank of Pakistan (SBP) were reported at US$18.5 billion, as of July 03, 2026.

Yields during first FY27 T-Bills auction fell by 31-40 bps across all tenors.

Cement sales rose 18%YoY in June 2026 to 4.3 million tons, led by domestic dispatches, taking full year FY26 sales to 50.5 million tons, a 4-year high.

Other major news inflow during the week included: 1) Saudi makes biggest oil price cut in decades, 2) GoP buys more LNG as flows through Hormuz fail to recover, 3) IMF forecasts 3.5% growth rate for Pakistan’s economy in FY27, 4) RDA inflows increased to US$2.8 billion in FY26, and 5) Removal of MDR to provide leverage to banks.

Top performing sectors were: Synthetic & Rayon, Refinery, and Leasing Companies, while lagged included: Sugar & Allied Industries, Close-End Mutual Funds, and Transport.

Major buying was recorded by Individuals and Banks aggregated US$24.5 million. Major sellers were Companies and Mutual Funds with flows of US$20.9 million and US$11.3 million, respectively.

Top performing scrips were: IBFL, GHNI, CNERGY, PGLC, and LOTCHEM, while laggards included: MEHT, NPL, TPLRF1, KTML, and SNGP.

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

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

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

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

Iran seeks to assassinate Donald Trump

Recent media reports alleging that Iran seeks to assassinate US President Donald Trump, alongside claims that Trump has instructed the United States to launch a devastating military response should such an attack occur, raise a far more important question than the headlines themselves. Are the rules governing the use of force universal, or are they reserved only for the powerful?

This is not a debate about personalities. It is a debate about principles.

For years, the United States and Israel have defended targeted killings of foreign military and political leaders as legitimate acts of self-defense or national security. Their argument is that extraordinary threats justify extraordinary measures. However, if this doctrine is accepted as a legitimate principle of international conduct, can other states not invoke the very same rationale when they perceive an existential threat?

The issue is not whether Iran is right or wrong. The issue is whether international law can survive if every country adopts the same standard. A principle that applies only to one nation is not a principle at all; it is simply an expression of power.

International politics has long demonstrated that labels are rarely neutral. One nation's freedom fighter is another nation's terrorist. Likewise, one country's "targeted strike" may be viewed by another as political assassination or an act of war. Perspectives differ, but the consequences remain the same.

Iran has endured US sanctions, diplomatic isolation and repeated military threats for nearly half a century. From Tehran's perspective, these policies represent continuous hostility. It is therefore understandable why successive Iranian leaders have described the United States as the "Great Satan." Whether one agrees with that description is beside the point. The reality is that prolonged confrontation has deepened mistrust on both sides.

History offers a consistent lesson. Political assassinations rarely resolve conflicts. More often, they fuel retaliation, strengthen hardliners, weaken diplomacy and perpetuate cycles of violence. Every action establishes a precedent, and every precedent eventually finds a new claimant.

The world should therefore resist the normalization of assassination as an instrument of statecraft. If the targeted killing of another country's political leadership becomes an accepted practice, no head of state can reasonably expect immunity from the same logic. Such a doctrine would make global politics less stable and far more dangerous.

The United States still has an opportunity to reverse this trajectory. Military threats, sanctions and coercion have failed to produce lasting stability in the Middle East. A renewed commitment to diplomacy, respect for sovereignty and the gradual easing of sanctions would serve regional and global security far better than another cycle of escalation.

The international order cannot be sustained through selective justice. The same rules must govern allies and adversaries alike. Otherwise, the world risks replacing the rule of law with the law of retaliation—a path from which there are no true victors.

The Gulf Must Not Become the Next Casualty

President Donald Trump's latest remarks should be treated as more than political rhetoric. For the Gulf Cooperation Council (GCC), they should serve as a strategic warning. Every indication that the United States is prepared to sustain pressure on Iran rather than prioritize reconciliation raises an uncomfortable question: who stands to lose the most from another prolonged regional confrontation?

The answer is unlikely to be Washington or Tehran. It is the Gulf.

Over the past decade, GCC countries have invested hundreds of billions of dollars to diversify their economies, attract foreign investment and transform themselves into global hubs for trade, finance and tourism. Those ambitions depend on one indispensable ingredient—regional stability. Every new military crisis threatens to undermine years of economic progress.

Modern conflicts are no longer judged solely by territorial gains or military victories. They also reshape energy markets, sustain defence industries, influence financial markets and reinforce geopolitical leverage. Periods of prolonged uncertainty often coincide with higher military spending, increased demand for sophisticated weapons systems and heightened volatility in global commodity and equity markets. International media organizations also benefit from continuous coverage of unfolding crises. Yet the countries closest to the conflict invariably bear the greatest economic and security costs.

Energy remains at the heart of this equation. Any threat to Gulf shipping routes or oil infrastructure immediately disrupts global markets, increases freight and insurance costs and weakens investor confidence. While uncertainty pushes energy prices higher, it also encourages consuming nations to diversify supplies and seek alternative sources, creating long-term challenges for traditional exporters.

The GCC must also confront a strategic reality. Iran possesses limited capability to inflict decisive damage on the United States itself. However, American military installations across the Gulf represent visible strategic assets that could become focal points during any wider regional escalation. Whether justified or not, the presence of these facilities inevitably exposes host nations to risks that originate beyond their own borders.

This does not argue for abandoning long-standing security partnerships. Rather, it calls for a sober reassessment of whether existing arrangements continue to maximize Gulf security or inadvertently increase regional vulnerability. Every sovereign nation has both the right and the responsibility to periodically evaluate defence partnerships in light of changing geopolitical realities.

The Gulf has reached a pivotal moment. "Business as usual" is no longer a strategy. GCC leaders should collectively champion de-escalation, strengthen regional diplomacy and ensure that their territories do not become the principal arena for conflicts driven by external rivalries. Stability—not perpetual confrontation—is the foundation upon which the Gulf's future prosperity, security and global influence will ultimately rest.

Trump’s Iran Policy: Follow the Money, Not the Rhetoric

Donald Trump returned to the White House promising to end America's "endless wars" and restore stability through the "America First" agenda. Yet his handling of Iran has told a different story. Since the fragile US-Iran ceasefire was announced, violations have become almost routine. Washington's position has oscillated between calls for restraint and renewed threats. The latest example came when President Trump declared that the interim deal aimed at ending the conflict was "over," once again injecting uncertainty into already fragile global markets.

The reaction was immediate. Wall Street's major indices slipped as investors reassessed geopolitical risks. The ripple effects reached far beyond the United States. Pakistan Stock Exchange also came under heavy selling pressure before recovering part of its losses by the close. Financial markets have become hostages to political messaging emanating from Washington.

During the US presidential campaign, I wrote that it mattered little whether Donald Trump or Kamala Harris won the election. The occupant of the White House would change, but the powerful interests shaping American foreign policy would remain remarkably constant. Recent developments have only reinforced that conviction.

Washington's Iran policy appears to have become an exercise in managing competing domestic interests rather than pursuing a coherent diplomatic strategy. Every escalation benefits someone. Defence contractors receive larger orders as regional insecurity grows. Oil companies gain from heightened uncertainty in energy markets. Wall Street profits from volatility that creates trading opportunities. Major media organizations thrive on continuous crisis coverage that attracts audiences and advertising revenues.

None of these realities proves that any one of these powerful constituencies dictates White House decisions. But when every major policy shift repeatedly advances their commercial interests, skepticism is both natural and justified. In politics, patterns often reveal more than official statements.

The uncomfortable truth is that modern American foreign policy increasingly resembles a marketplace where geopolitical crises generate economic opportunities for influential stakeholders. Peace rarely produces exceptional corporate earnings. Tension does.

This is why Trump's changing posture towards Iran deserves closer scrutiny. The issue is not whether he personally seeks confrontation or compromise. The more important question is whether any American president can formulate Middle East policy free from the influence of the military-industrial establishment, energy giants, financial markets and the corporate media.

Perhaps the real lesson is this - American presidents come and go, campaign slogans change, and foreign policy narratives evolve. Yet the beneficiaries of prolonged instability appear strikingly familiar. Until that cycle is broken, the world will continue to pay the price for wars that are declared in the name of security but often end by serving the interests of power and profit.

Trump and Netanyahu Have Made Iran a Regional Superpower

The greatest irony of the US-Israel military campaign against Iran is that it appears to have produced results opposite to those publicly declared by Washington and Tel Aviv. While Iran has undoubtedly suffered significant human, economic and infrastructure losses, the conflict has also demonstrated an uncomfortable reality - overwhelming military superiority does not always translate into strategic success.

The campaign, which began on February 28, 2026, was widely seen as an effort to weaken Iran's military capabilities, curtail its regional influence and force political concessions. Yet Iran has neither capitulated nor abandoned its strategic objectives. Instead, it has displayed remarkable resilience despite living under US sanctions for nearly half a century. History shows that nations subjected to prolonged external pressure often emerge more self-reliant, strategically patient and politically determined.

Perhaps the most significant consequence of the conflict has been the transformation of regional perceptions. Iran is increasingly viewed not merely as a country capable of surviving sustained military pressure, but as a state able to impose meaningful costs on two of the world's most powerful military forces. Whether one agrees with Tehran's policies or not, that perception alone strengthens its deterrence and elevates its regional standing.

The conflict has also prompted difficult questions about the United States' role in the Middle East. For decades, several regional governments relied on Washington as the ultimate guarantor of their security. Today, many are reassessing the costs and risks of that dependence. If confrontation with Iran places neighbouring states directly in harm's way, outsourcing national security no longer appears as reassuring as it once did.

Arab capitals also face an unavoidable geographical reality. Iran may lack the capability to strike the US mainland directly, but it possesses the means to target American military installations and strategic assets across the Gulf. Even without launching such attacks, the possibility alone has heightened concerns among governments hosting US forces and critical energy infrastructure.

Adding another layer of complexity are reports that Israel has offered to accommodate additional US military deployments on its territory. Whether viewed as strategic cooperation or military consolidation, such developments reinforce the perception that the regional security architecture is becoming increasingly polarized. Some Arab policymakers may also fear that refusing to align with initiatives such as the Abraham Accords could expose them to greater political and military pressure.

The broader geopolitical implications may prove even more consequential. If the United States gradually reduces its military footprint in the Arabian Peninsula, the resulting strategic vacuum is unlikely to remain unfilled. China and Russia have steadily expanded their diplomatic, economic and security engagement across the region and would be well positioned to deepen their influence as regional states diversify their strategic partnerships.

Ironically, a campaign intended to isolate and weaken Iran may instead be remembered for strengthening its regional position. Military conflicts often reshape perceptions more profoundly than they alter borders. In that respect, history may ultimately record that Trump and Netanyahu achieved the opposite of their declared objectives by helping transform Iran into a more influential and formidable regional power.

Hormuz Security: Responsibility and Compensation Must Go Together

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

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

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

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

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

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

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

PSX benchmark index up 3.2%WoW

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

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

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

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

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

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

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

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

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

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

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

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

Additionally, favorable financial results for the period ended June 30, 2026 would support market sentiment in the near term.

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

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

Restraint at Iran's Defining Moment

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

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

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

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

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

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

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

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

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

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

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

US Military Bases: Security Shield or Regional Liability

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

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

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

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

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

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

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

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

Strait of Hormuz: Blockade Becoming a Geopolitical Instrument

The announcement of a truce between United States and Iran created expectations that tensions around the Strait of Hormuz would ease. However, the continued disruption of shipping activity, with vessels and crews still stranded, suggests that the crisis is far from resolved. The world’s most critical energy chokepoint remains under pressure — raising a fundamental question, is this merely a security crisis, or is it becoming a tool of geopolitical influence?

An emerging perception among some analysts is that the prolonged disruption may unintentionally — or strategically — serve the interests of certain global powers, including the United States. While such assessments require careful scrutiny, the geopolitical consequences are undeniable.

For the Gulf Arab states, the crisis has exposed the risks of relying excessively on external security guarantees. Over the years, several Gulf Cooperation Council (GCC) members have debated whether outsourcing regional security to Washington remains the most sustainable approach, particularly given America’s strong strategic alignment with Israel and its broader Middle East priorities.

The disruption of Hormuz also directly affects the economic interests of major Arab energy exporters. Any restriction on oil flows limits export revenues and creates additional pressure at a time when some Gulf states have been reassessing their security partnerships and strategic autonomy.

The situation has also complicated the regional diplomatic landscape. The initial momentum surrounding the Abraham Accords has faced growing challenges, with some GCC members showing greater caution about deeper engagement amid shifting regional realities.

At the same time, Iran’s energy exports remain under pressure. Any prolonged disruption affecting Iranian oil supplies, particularly shipments destined for China, adds another dimension to the wider US-China strategic competition. Energy security has increasingly become a component of geopolitical rivalry.

Meanwhile, the global energy market has undergone a historic transformation. The United States has emerged as one of the world’s largest oil producers and exporters while expanding its influence in LNG markets. In an environment where supply routes face uncertainty, energy producers with alternative capacity gain strategic importance.

However, the continuation of the crisis also carries significant risks. Higher energy costs, renewed inflationary pressures, and disruption of global trade could create consequences far beyond the Middle East.

The Strait of Hormuz is no longer merely a maritime passage for oil shipments; it has become a symbol of the intersection between energy, security, and global power politics. The critical question is not only who benefits from the disruption, but whether the long-term costs of using energy routes as instruments of strategic competition will outweigh the short-term gains.

The Netanyahu Dilemma: When an Ally Becomes an Obstacle

For years, Benjamin Netanyahu built his political reputation around a powerful proposition: that he was the Israeli leader best positioned to ensure that Washington and Jerusalem remained firmly aligned, particularly on Iran.

His ability to cultivate strong support within American political circles, especially among Republicans, became one of his greatest strategic assets. His repeated warnings about Tehran, his opposition to the Iran nuclear agreement, and his direct engagement with the US political system reinforced the perception that Netanyahu possessed unmatched influence over American policy.

However, the emerging US-Iran understanding has exposed a growing gap between Washington’s broader strategic calculations and Netanyahu’s preferred approach.

The United States appears increasingly focused on containing escalation and preventing another prolonged Middle East conflict. While its commitment to Israel’s security remains intact, Washington seems less willing to allow one partner’s immediate priorities to determine the direction of its regional strategy.

This creates the Netanyahu dilemma.

An ally can remain a valued partner while its policies become difficult to reconcile with another country’s evolving interests. For Washington, the challenge is not abandoning Israel, but managing a relationship where strategic priorities are no longer perfectly aligned.

Netanyahu’s political strength was built on the belief that he could convince successive US administrations that maximum pressure on Iran was the only viable option. The current diplomatic shift suggests that this influence has limits.

The Israeli leader now faces a difficult domestic and international balancing act. Continuing confrontation risks deeper disagreements with Washington, while accepting diplomatic compromises may create political challenges at home.

The upcoming Israeli elections could become a turning point. Not because Washington controls Israel’s political choices, but because a change in leadership could naturally provide room for a different approach while preserving the broader US-Israel relationship.

Netanyahu entered the Iran conflict promising historic achievements — weakening Tehran, reducing the influence of its regional partners, and expanding Israel’s diplomatic breakthroughs. Yet the outcome has been far more complicated. Iran remains a significant regional actor, tensions continue, and the path toward wider normalization has become more uncertain.

The irony is that the leader who spent decades presenting himself as indispensable to Washington may now find his greatest political asset becoming a source of strategic friction.

History shows that alliances survive when they adapt to changing realities. The question facing Netanyahu is whether he can adjust to a new regional order — or whether his political legacy will be defined by the moment when a trusted ally became an obstacle to a different strategic path.

PSX shortened trading week closes almost flat

Pakistan stock Exchange (PSX) witnessed volatility during the shortened trading week, as the benchmark Index declined through the first two trading days before recovering in the final session to close at 179,571 points, up 0.4%WoW. Due to the rollover activity, market participation increased to average daily trading of 1.5 billion shares as compared to 1.4 billion shares in the prior week.

On the positive side was, the US and Iran formally agreed on a 60-day roadmap towards a final deal, sustaining the recent downward momentum in international oil prices, extending decline on expectations of smoother crude flows through the Strait of Hormuz.

Sentiments further improved by Iranian President's visit to Islamabad.

The National Assembly passed the PKR18.8 trillion FY27 budget, broadly favorable for key sectors including Cement, Steel, Refineries, Textiles, Pharma, and Technology, alongside reduction/ elimination of super tax for individuals and corporates.

Another positive was the reduction in petrol prices.

The T-Bill auction saw cut-off yields falling sharply across all tenors.

Broad money supply (M2) rose 9.2% FYTD to PKR44.2 trillion as of June 12, 2026 driven primarily by a 2.8%WoW increase in scheduled bank deposits.

Other major news flow during the week included: 1) Gulf oil tanker rates nearly doubled as Middle East producers accelerated crude exports, 2) Pakistan expected to save US$3.24 billion through conversion of the Jamshoro Power Plant, 3) Government and the oil industry reached an agreement on a stable petroleum pricing formula, and 4) GoP to handover PIA to new owners by the month-end.

The most active sectors were: Leather & Tanneries, Sugar & Allied Industries, and Textile Composite, while laggards included: Vanaspati & Allied Industries, Synthetic & Rayon, and Refinery.

Major buying was recorded by Companies of US$209.3 million, while major net selling was recorded by Foreigners of US$159.4 million.

Top performing scrips were:  KEL, SRVI, MLCF, ILP, and SNGP, while laggards included: SSOM, AIRLINK, TPLRF1, BAFL, and ABL.

According to AKD Securities, progress on US-Iran deal, along with International oil prices would remain the key focus. Additionally, ease in inflation amid decreased oil prices and favorable financial results for June 2026 would support market sentiment in the near term.

Market continues to trade at attractive valuations.

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

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

Brewing Crisis on Red Sea and Horn of Africa

While global markets remain focused on the Strait of Hormuz and the economic fallout from the US-Israel war on Iran, another geopolitical risk is quietly developing along a different but equally important maritime corridor — the Red Sea and the Horn of Africa.

The region has historically been a crossroads of competition, conflict, and strategic interests. Today, rising tensions between Ethiopia, its northern Tigray region, and Eritrea are reviving concerns that a fragile peace could unravel. The Horn of Africa has endured decades of instability, and any renewed confrontation could create a new security challenge at a time when the world economy is already facing multiple disruptions.

The risks extend beyond national borders. Ethiopia’s internal challenges, Eritrea’s strategic ambitions, and the continuing civil war in Sudan are creating overlapping crises that could draw in regional and external powers. What begins as a local dispute can quickly evolve into a broader geopolitical contest when it involves a region located next to one of the world’s most important shipping routes.

The Red Sea is not merely a regional waterway; it is a lifeline of global commerce. Connecting the Indian Ocean with the Mediterranean through the Suez Canal, it carries a significant portion of international trade, including critical energy shipments and container traffic. Any disruption to ports, shipping lanes, or maritime infrastructure would add further pressure to global supply chains already strained by geopolitical uncertainty.

The timing makes the situation even more concerning. The world is already watching developments around the Strait of Hormuz, another vital energy corridor. A simultaneous crisis affecting both routes could create a serious challenge for energy markets, increase freight costs, raise insurance premiums, and intensify inflationary pressures.

For policymakers and businesses, the message is clear - geopolitical risks are no longer confined to battlefields; they directly influence markets, trade flows, and economic stability. The experience of recent years has shown that supply chains can be disrupted rapidly when strategic chokepoints come under pressure.

The Red Sea crisis may not yet dominate global headlines, but ignoring early warning signals could prove costly. In an interconnected world, stability in distant regions has become a direct economic interest for every nation.

The storm clouds gathering over the Horn of Africa deserve attention before they become another global crisis.

Oil, Iran and Hurmuz: Need to Remain Alert

The possibility of a renewed understanding between the United States and Iran over crude oil exports has already started influencing global energy markets. The immediate response has been visible - crude oil prices have begun moving lower as traders factor in the possibility of additional Iranian supply returning to the international market.

Many market participants may recall that after the US-Israel strikes on Iran, geopolitical uncertainty pushed West Texas Intermediate (WTI) into an unusual position, trading at a premium to Brent. That temporary distortion reflected fears of supply disruption and heightened risks around the Strait of Hormuz. As diplomatic signals improved, the traditional relationship between the two benchmarks has returned, with WTI again trading at a discount to Brent.

The critical question now is the scale of Iran’s potential return to the oil market. While political statements often create optimism, actual export volumes depend on sanctions, logistics, shipping availability, payment channels and production capacity. A realistic assessment suggests that Iran may initially be able to increase exports by around half a million barrels per day rather than immediately flooding the market with large volumes.

The broader supply picture will also depend on Gulf producers. Any recovery or expansion in crude oil and gas exports from GCC countries would provide additional comfort to global energy markets, but such adjustments require time. Production decisions, infrastructure readiness and shipping arrangements cannot change overnight.

For US oil and gas companies, this evolving scenario presents a dual challenge. First, increased global supply competition could limit export opportunities. Second, lower international prices would directly affect revenues and profitability. If additional supply enters the market while global demand growth remains moderate, WTI prices could face renewed pressure and potentially move below the US$70 per barrel mark.

However, energy markets have repeatedly demonstrated that economics and geopolitics are deeply interconnected. Lower prices may benefit consumers and energy-importing nations, but they can also create pressure on producers and strategic stakeholders whose interests are linked with higher prices and controlled supply flows.

That is the reason, the security of major energy routes remains a critical concern. The Strait of Hormuz is not merely a shipping channel; it is one of the world’s most important energy arteries. Any attempt by state or non-state actors to disrupt tanker movement could quickly change market sentiment and reverse the current downward trend in prices.

The lesson for policymakers is clear - energy stability cannot be measured only by production volumes or price forecasts. It also depends on maintaining secure trade routes, diplomatic engagement and preparedness for unexpected disruptions.

Markets may be reacting to hopes of greater supply today, but strategic planning requires attention to the risks that may emerge tomorrow. In energy geopolitics, vigilance remains the foundation of security.

PSX benchmark index up 4%WoW

Pakistan Stock Exchange (PSX) witnessed positive momentum during the week ended on June 18, 2026, driven by a promising US-Iran deal causing oil prices to fall below US$80/ bbl, a 3-month low, alongside a favorable budget for most sectors including Cement, Steel, Refineries, Textile, Pharma and Tech, coupled with reduction/ elimination of super tax for individuals and corporates. The sentiments were further supported by a status quo by the central bank in its Monetary Policy Committee (MPC) meeting on Tuesday. However, the postponement of commencement of technical talks between US and Iran during Friday’s early hours slightly tempered the momentum on the final day, despite an overall positive week. The benchmark Index gained 6,523 points or 4%WoW, to close the week at 178,923 points. Market participation improved considerably, with average daily trading volume increasing by 53%WoW to 1.4 billion shares, as against 900 million shares in the prior week.

On the macroeconomic front, Current Account showed a surplus of US$459 million in May 2026, as against a deficit of US$44 million in same period last year.

IT exports rose 13%YoY to US$373 million during the same month.

Yields in the first PIB auction following the recent MPC declined by to 12.14%, 12.09%, 12.19%, and 12.61% for 2, 3, 5 and 10 year tenors, respectively.

LSM index rose 6.4%YoY in 10MFY26.

Urea offtakes remained flat YoY at 419,000 tons in May 2026 and DAP sales fell 36%YoY due to higher prices.

Other major news flow during the week included: 1) oil and gas shipments through Strait of Hurmuz commenced after signing of MOU between United States and Iran, 2) foreign exchange reserves held by SBP rose to US$17.2 billion as of June 12, 2026, 3) Power generation declined 1% in May, 4) Power sector circular debt rose to PKR1.9 trillion in 10MFY26, and 5) Textile exports rose 2%YoY to US$16.7 billion in 11MFY26.

Top performing sectors were: Vanaspati & Allied Industries, Transport, and Jute, while laggards included: Property, Woolen, and Sugar & Allied Industries

Major buying was recorded by Mutual Funds of US$63.4 million. Major selling was recorded by Insurance amounting to US$59.7 million.

Top performing scrips were: SSOM, PSX, SNGP, SSGC, and FATIMA, while laggards included: JVDC, HCAR, TRG, BNWM, and ATLH.

According to AKD Securities, compliance of peace deal along with positive outcomes of technical talks between US and Iran, followed by favorable financial results for the period ended June 30, 2026, will support market sentiment in the near term.

Market continues to trade at attractive valuations.

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

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

Strategic Triumph or Political Narrative

Iran’s decision to declare victory after signing a memorandum of understanding (MOU) with the Trump administration has triggered a new debate, is Tehran celebrating a genuine strategic achievement, or is it shaping a political narrative for domestic and regional audiences?

From Iran’s perspective, there are clear reasons for confidence. The agreement ends a damaging confrontation, reopens the Strait of Hormuz, removes immediate military pressure and creates the possibility of relief from restrictions on its oil and banking sectors. Most importantly, Tehran has avoided the outcome many feared, a forced political collapse or a decisive military defeat. In international politics, preserving national sovereignty under extreme pressure is often considered an achievement.

Iran can also argue that Washington’s decision to negotiate represents recognition that maximum pressure and military action alone could not achieve all American objectives. A return to diplomacy suggests that both sides eventually accepted the limits of coercion.

However, the declaration of victory may be premature. The MOU is not a final settlement but the beginning of a difficult negotiating process, particularly regarding Iran’s nuclear program and broader regional issues. The durability of Iran’s gains will depend on implementation, economic recovery and whether future disagreements lead to renewed confrontation.

The reaction inside Iran also reflects a more complex picture. Supporters of the government view the agreement as evidence of resistance and national strength. Hard-line groups, however, argue that Iran had greater leverage and should have demanded more concessions. Meanwhile, ordinary citizens appear focused less on political symbolism and more on whether the agreement improves daily economic conditions and reduces uncertainty.

The United States also faces a complicated outcome. Washington retains influence through diplomacy, sanctions mechanisms and future negotiations, but it cannot claim a complete victory when military pressure ultimately led back to the negotiating table.

The reality is that neither side achieved all of its objectives. Iran gained survival, diplomatic space and potential economic relief, while the United States achieved a pause in escalation and a framework for further negotiations.

The MOU should therefore not be viewed simply as an Iranian victory or an American defeat. It represents a temporary balance of power where both sides accepted that confrontation had limits.

History will judge this agreement not by the celebrations that followed its signing, but by whether it produces lasting stability, economic improvement and a sustainable solution to one of the world’s most dangerous geopolitical disputes.

Ceasefire Ambition and Strategic Ambiguity

The reported 14-point memorandum of understanding on ending the Iran conflict, as cited by The Hill and attributed to Bloomberg and CNN sources, presents a sweeping and highly consequential framework. Yet, rather than signalling a settled peace architecture, it raises fundamental questions about legitimacy, sequencing, and strategic intent.

According to the reported text, the United States and Israel initiated military action while negotiations were still ongoing, without prior consultation of the United Nations Security Council or clear congressional authorization. This sequencing alone casts doubt on the institutional grounding of the process, especially when such a far-reaching agreement is now expected to carry binding implications.

The proposed structure appears heavily front-loaded with political assurances but back-loaded with enforceable obligations. A key example is the creation of a US$300 billion reconstruction fund for Iran, reportedly to be financed by the United States “together with its regional partners.” This raises a critical equity question: why should regional actors shoulder reconstruction costs while the responsibility for conflict escalation remains contested?

Equally contentious is the ambiguity surrounding sanctions. While the draft suggests a commitment to lifting “all types of sanctions,” it simultaneously defers implementation to a final agreement, leaving Iran’s economic reintegration uncertain and conditional. The immediate easing of oil export restrictions and unfreezing of Iranian assets further complicates the sequencing, effectively front-loading economic relief before verifiable political concessions.

On the nuclear dimension, the agreement reportedly reiterates Iran’s commitment not to develop nuclear weapons, while maintaining the “status quo” of its enrichment program. However, without explicit, time-bound constraints or robust verification mechanisms involving neutral actors, such as additional oversight by the United Nations Security Council, the arrangement risks replicating past cycles of mistrust.

President Trump’s assertion that the memorandum is “not final” and his warning of renewed bombing if Iran does not “behave” further underscore the fragility of the arrangement. Diplomacy framed by conditional coercion may secure short-term de-escalation, but it leaves long-term stability unresolved.

Ultimately, the reported MOU reflects less a conclusive peace settlement and more an evolving geopolitical bargaining framework—one that demands closer scrutiny of sequencing, burden-sharing, and institutional legitimacy before it can credibly translate into lasting regional stability.

Safe Departure of Stranded Crew

Both the International Chamber of Shipping (ICS) and the International Maritime Organization (IMO) welcomed news of the US-Iran peace deal and the expected re-opening of the Strait of Hormuz.

The closure of the key waterway to all but a trickle of traffic since February 28, has left around 1,000 ships and 20,000 crew stranded in the Arabian Gulf.

“This announcement comes as a relief to the 20,000 seafarers who have been caught in the middle of this war. Their safe departure from the region must be a top priority but will take time,” said ICS Secretary General Thomas Kazakos.

The ICS is looking to the IMO to help facilitate this process. “With around 500 ships needing to pass through the Strait to exit the area this will require coordination.  The International Maritime Organization has a crucial role, working alongside industry and states in the region, to ensure this is done as safely and as quickly as possible,” Kazakos said.

In a separate statement IMO Secretary-General Arsenio Dominguez, said, “The agreement also allows IMO to advance its plan to evacuate the thousands of seafarers stranded in the area. The Organization is working in close collaboration with Member States and partners to implement this plan safely and effectively. However, its implementation will require time to ensure that all necessary safety and security guarantees are in place.”

Details of the re-opening of the Strait and when it will happen remain unclear although it is expected after the signing of the peace deal between US and Iran on 19 June.

Both ICS and IMO stressed the need for a return to freedom of navigation in the Strait of Hormuz and paid tribute to innocent seafarers who lost their lives in the conflict.

“This signals a crucial return to peace, dialogue, multilateralism and diplomacy, and in particular, an important step toward restoring safety in this vital maritime corridor for seafarers and ships, as well as safeguarding the fundamental principle of freedom of navigation,” IMO said.

Kazakos from ICS stated, “The fundamental principle of freedom of navigation has been sidelined during the war, and many seafarers have regrettably been injured or lost their lives. As we now hopefully move towards peace, we must see a permanent return to vessels being able to pass through the Strait of Hormuz unimpeded without paying a toll or other clearance mechanism.” 

IMO Secretary-General Dominguez has repeatedly highlighted the plight of seafarers caught in the conflict and the unacceptable targeting of commercial shipping. The IMO said the Secretary-General expressed his deepest sympathies for all victims of the conflict, and paid particular tribute to the innocent seafarers affected and to their families. 

Courtesy: Seatrade Maritime News