US Must Shift from Escalation to Diplomacy

The United States' decision to relocate military aircraft from British air bases over a potential Iranian threat raises an important question; has Washington finally realized that the risks of prolonging this war are becoming increasingly difficult to manage?

According to media reports, the US Air Force relocated ten refuelling aircraft from RAF Mildenhall in England to Germany, Spain and Scotland. Osprey transport aircraft were also moved to another nearby base. Security at two British air bases was reportedly raised to the second-highest threat level in the US military's protection system.

Although British authorities have maintained that there is no immediate or direct threat to these installations, the American decision to reposition military assets speaks for itself. This is not simply a routine movement of aircraft. It reflects growing concern about the vulnerability of US military infrastructure.

One wonders what has triggered such anxiety. Iranian aircraft, drones and missiles are unlikely to reach British military bases. However, the threat should not be assessed exclusively in terms of geographical reach or conventional military capability. Iran may have developed asymmetric capabilities that can disrupt navigation, communications and other critical systems over considerable distances.

If Iran can interfere with aviation and navigation systems beyond the immediate theatre of conflict, even the most sophisticated American military aircraft could become vulnerable. Modern warfare is no longer determined exclusively by the range of missiles or the number of aircraft deployed. Electronic warfare, cyber capabilities and disruption of critical infrastructure can neutralize expensive military hardware without physically destroying it.

The repeated relocation of American aircraft from British bases should therefore be viewed as a warning rather than an isolated security precaution. Washington must recognize that further escalation could expose its military assets, weaken its international standing and undermine its claim to be an invulnerable superpower.

Donald Trump must reconsider his strategy. Instead of committing additional resources to an increasingly unpredictable confrontation, he should declare a unilateral ceasefire and open the door to meaningful diplomacy.

There is no merit in escalating a war that is increasingly exposing the limitations of American military power. Knowing when to stop is also a demonstration of leadership.

President Trump, You Committed Horrendous Mistakes, Please Pay the Price

Donald Trump and his cronies are now blaming the Iran war for their defeat in the midterm elections. By doing so, they are indirectly endorsing the argument of their critics: the war has not only tarnished America’s image as a superpower but has also transformed Iran into a more formidable regional adversary. I have a question for the entire US administration: Why did the world’s superpower become subservient to Benjamin Netanyahu?

Since the Islamic Revolution of 1979 and the debacle of the US embassy hostage crisis, successive American presidents have been advised against launching a direct military attack on Iran. Nevertheless, Washington continued to challenge the Iranian clergy through proxies, regime-change initiatives, and its maximum pressure strategy.

Keeping these historical developments in mind, President Trump committed a horrendous mistake by joining Israel’s war against Iran. What many now describe as the US-Israel war on Iran that has exposed the limitations of American strategic calculations.

The administration knew very well that deploying American ground troops inside Iran was neither a viable nor a politically sustainable option. Consequently, both the United States and Israel relied heavily on air strikes. However, military superiority failed to yield the desired political outcomes.

The use of military bases in GCC member countries further complicated the situation. Iranian retaliatory strikes inflicted considerable damage on US military bases and strategic installations in the Gulf, raising serious questions about Washington’s ability to protect its regional allies.

Some critics even argue that the United States failed to establish an effective blockade of the Strait of Hormuz. Iran, instead, demonstrated its ability to manage the entry and exit of ships, while oil exports of GCC countries suffered considerable disruption.

The consequences extend beyond military losses. America’s credibility, its security assurances to Gulf allies, and its image of unquestionable military supremacy have all been seriously challenged.

Trump must now confront an uncomfortable reality: a war fought to advance Israel’s strategic interests has instead weakened America’s global standing.

The president cannot escape responsibility by blaming the war for his electoral defeat. He must acknowledge his strategic miscalculations, reconsider his subservience to Netanyahu, and accept the political consequences of his decisions.

President Trump, you committed horrendous mistakes. Please pay the price.

Pakistan Likely to Pay the Cost of Following Trump

The humiliating failure of President Donald Trump’s doctrine of maximum pressure on Iran may have far-reaching consequences for Pakistan. Islamabad, having invested considerable diplomatic capital in facilitating Washington’s regional agenda, could find itself facing a difficult geopolitical and economic situation. Pakistan’s perceived alignment with US foreign policy has created serious challenges for its regional standing.

First, Islamabad risks further distancing itself from three countries with which it shares common borders. A foreign policy perceived as serving Washington’s interests rather than Pakistan’s national priorities could undermine its relationships with neighbouring states.

Second, Pakistan’s emergence as a key mediator between Washington and Tehran may lose its relevance. If the United States fails to achieve its strategic objectives, Islamabad’s diplomatic importance could diminish. Consequently, the political goodwill and economic concessions anticipated from Washington may not materialize.

Third, Pakistan may face a cold shoulder from China and Russia. Both countries have strategic interests in the region that are not necessarily compatible with Washington’s objectives. Islamabad cannot afford to jeopardize its longstanding relationships with these major powers in pursuit of uncertain American benefits.

Fourth, relations with the Gulf Cooperation Council (GCC) member countries could become less cordial. Although Pakistan maintains longstanding security and economic ties with Arab states, its perceived association with an unsuccessful US strategy may complicate regional diplomacy.

Fifth, Pakistan could face difficulties securing concessional loans, financial assistance and rollover facilities from its Arab brotherly countries. Given its persistent dependence on external financing, even a modest reduction in financial support could create substantial economic pressure.

Finally, the proposed US$10 billion exchange stabilization facility could remain elusive. If Washington decides to withhold the proposed support, Pakistan may discover that diplomatic alignment does not necessarily translate into financial rewards.

The fundamental question is whether Pakistan has adequately assessed the cost of its foreign-policy choices. A country surrounded by complex geopolitical realities cannot afford to place its strategic interests in a single basket.

Pakistan must urgently revisit its foreign policy, prioritizing national interests, regional stability and economic sovereignty over expectations of political patronage from Washington.

Diplomatic relevance is valuable, but it must not come at the expense of strategic independence.

PSX benchmark index up 4.5%WoW

The Pakistan Stock Exchange (PSX) extended its gains during the outgoing week amid ongoing diplomatic efforts to end the Middle East conflict, including Qatar-mediated US-Iran talks, and a decline in international oil prices. The benchmark gained 7,477 points, up 4.5%WoW, to close at 173,887 on Friday, November 06, 2026, with average trading volume recorded at 1,021 million shares, but still down 7%WoW.

The US midterm elections were held on Tuesday, with Democrats winning control of both houses of Congress, leading to hopes of reduced geopolitical tensions and eased interest rates.

Brent crude eased by 15.9%WoW to US$98.8/ bbl as of Friday.

On the macroeconomic front, CPI inflation eased to 9.6%YoY in October 26, 2026 translating into 4MFY27 average inflation of 10.1%YoY as compared to 4.7% in the same period last year.

The Government of Pakistan (GoP) raised PkR393 billion through the latest PIB auction against the target of PKR350 billion, while cut-off yields declined by 11bps/10bps for the 3/5-year tenors and remained unchanged for the 2/10-year tenors.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased to US$21.6 billion as of October 30, 2026.

Petrol and HSD prices were reduced by PKR25.3/ltr and PKR18.4/ltr to PKR352.6/ltr and PKR382.3/ltr, respectively.

Cement offtakes increased 0.4%YoY to 4.8 million tons in October 2026, with local sales supported by recovering construction activity while exports declined amid the continued Afghan border closure.

OMC offtakes rose 4%YoY to 1.6 million tons, led by higher RFO sales as RLNG supply disruptions shifted power generation to RFO.

Other major news flow during the week included: 1) IMF Executive Board meeting is expected next month, which could unlock around US$1.2 billion for Pakistan, 2) Pakistan LNG Limited issued tenders for two spot LNG cargoes, 3) GoP proposes LPG market reforms, 4) CPPA-G sought an increase of about 8% in the average power purchase price to PKR27.309/ kWh for CY27, and 5) Discos seek positive QTA adjustment of PKR1.34/kWh.

Top performing sectors were: Leasing, Modaraba, and Synthetic, while sectors that lagged the most were: Paper, Refinery, and Jute.

Major net buyers were Mutual Funds (US$27.8 million) and Companies (US$7.9 million). On the contrary, major selling was recorded by Banks (US$10.0 million) and Individuals (US$6.9 million).

Top performing scrips were: PSEL, PIOC, DGKC, GAL, and FCCL. On the other side, laggards included: CNERGY, ATRL, IMAGE, BWCL, and THCCL.

AKD Securities expects the market to improve on the back of strengthening economic indicators. Moreover, any positive development on Middle East conflict could moderate international oil prices and serve as a key trigger for market as it paves the way for monetary easing.

The market continues to trade at attractive valuations, with forward P/E of 6.3x. Our t

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

Pete Hegseth: Finally a Scapegoat Found

The November 4 midterm elections have created an unexpected political challenge for the Trump administration. The Democrats’ sweeping victory has intensified scrutiny of the US-Israel war on Iran, raising questions about its objectives, consequences, and the absence of a credible exit strategy.

In my November 4 blog, “America’s Tarnished Image: The Syndicate Must Find a Way Out,” I argued that The Syndicate might have to find a scapegoat to recast a negotiated settlement as strategic correction rather than an admission of defeat. The emerging controversy surrounding Pentagon Secretary Pete Hegseth appears to offer precisely such an opportunity.

Republican Congressman Thomas Massie of Kentucky has threatened to reintroduce eight articles of impeachment against Hegseth unless he resigns. The allegations include extrajudicial killings, conducting wars without congressional authorization, and other abuses of power. Meanwhile, reports suggest that Republican lawmakers are increasingly blaming Hegseth for persuading President Donald Trump to attack Iran without a viable exit strategy.

The political irony is striking. Hegseth, one of the administration’s most enthusiastic advocates of military action, could eventually become its most convenient casualty. Vice President JD Vance has reportedly described the Iran war as a mistake, while congressional opposition to Hegseth is gaining momentum. Even the possibility of replacing him has reportedly entered White House discussions.

However, the question is whether sacrificing Hegseth would genuinely address the strategic failure or merely provide a temporary political cushion for the administration.

Trump has publicly defended his Defense Secretary, praising his performance and insisting that he has no immediate plans to remove him. Yet political loyalty can become expendable when electoral consequences threaten the administration’s survival. Hegseth’s removal could allow Trump to distance himself from the war’s disastrous consequences while shifting responsibility to one of its most vocal advocates.

The Syndicate may find it increasingly difficult to maintain a united front. A military campaign that promised strategic gains has instead exposed the limits of American power, intensified domestic political divisions, and damaged Washington’s international credibility.

Hegseth’s departure, whether through resignation, impeachment, or dismissal, could provide Trump with an opportunity to reposition himself. But replacing the architect of a failed strategy does not automatically produce a successful one.

The ultimate test will be whether The Syndicate chooses genuine strategic correction or simply searches for another scapegoat. America’s tarnished image cannot be restored by sacrificing one official while those responsible for the strategic miscalculation escape accountability.

Eisenkot’s Entry, Netanyahu’s Exit: Can They Bring Peace to the Region?

Benjamin Netanyahu enjoys the distinction of being Israel’s longest-serving prime minister. Over the years, he has pursued a policy of eliminating Israel’s perceived enemies, particularly Iran. The devastation in Gaza, where nearly 80,000 people have reportedly been killed, mostly women and children, has earned him widespread condemnation and allegations of war crimes. His decision to wage war on Iran in collaboration with the United States has further turned his perceived achievements into liabilities. The conflict has also exacted a political price in Washington, with the Iran war being cited as a major factor behind Donald Trump’s defeat in the midterm elections.

Removing Netanyahu from the political scene, at least temporarily, may be a prudent approach to prevent Israel from earning further condemnation. Having initiated the confrontation with Iran, Netanyahu is hardly the most credible figure to pursue meaningful negotiations. He should hand over the task of “washing the dirty linen” to someone capable of changing course.

Management teaches the importance of succession planning. Netanyahu, however, positioned himself as the indispensable “savior of Israel,” leaving little room for alternative leadership.

Gadi Eisenkot offers a potential alternative. Israel needs political courage to break the existing deadlock. Eisenkot should explore an arrangement with Arab parties to form a coalition government. Such cooperation would demonstrate that Israel’s political future need not depend on excluding its Arab citizens.

Eisenkot could then stand tall—not as another architect of an endless war, but as a leader willing to end it. His mandate should be to facilitate diplomacy, regional coexistence and a negotiated settlement, rather than perpetuate military escalation.

Israelis need peace and a congenial environment in their neighborhood. This requires abandoning the policy of keeping Palestinians subjugated and giving the two-state solution a genuine chance. Without addressing the Palestinian question, regional stability will remain elusive.

The war is approaching its ninth month. Netanyahu’s departure and Eisenkot’s emergence may not guarantee peace, but they could open a political and diplomatic door that remains firmly shut under the incumbent.

Eisenkot’s entry and Netanyahu’s exit could provide the political reset necessary to end the US-Israel war on Iran and begin rebuilding regional stability.

America’s Tarnished Image: The Syndicate Must Find a Way Out

Losing its majority in both houses of Congress may constrain Donald Trump, but it does not strip him of executive authority. The president retains veto power and can take certain actions without prior Senate approval, subject to constitutional and statutory limits. Apparently, little has changed in Washington’s political arithmetic.

Let us examine the continuity of US policy through two priorities: favouring Israel and maintaining an uncompromising posture toward Iran. I tend to believe that business will continue as usual, with Trump still enjoying the blessing of what I call “The Syndicate”—powerful interests sustaining this strategic orientation.

The two failed attempts to impeach Trump also invite scrutiny. In my view, they have not succeeded without The Syndicate’s tacit blessing. Another attempt may emerge, but the probability of success remains low. Congressional opposition alone may prove insufficient to reverse the administration’s course.

One possible source of pressure is the diaspora, which could take the lead in mobilizing domestic constituencies in the name of protecting the “have-nots.” Such mobilization could compel Washington to reconsider the resources and political capital being expended on overseas conflicts.

Yet the biggest challenge is restoring the tarnished image of the United States as a superpower. Ending the US-Israel war on Iran is not an easy task. It requires accepting the reality that Washington has not succeeded in bringing Tehran to its knees. An overt retreat would be portrayed as defeat; an outcome the administration would be reluctant to acknowledge.

Here lies a possible way out: The Syndicate has to find a scapegoat. A senior official, military adviser, or policy architect could be held responsible for misjudgment, flawed intelligence, or unrealistic war objectives. This would provide the administration with a political mechanism to recast a negotiated settlement as strategic correction rather than an admission of defeat.

However, scapegoating alone cannot end the conflict. A mediated ceasefire, reciprocal security assurances, and phased de-escalation, with Iran’s sovereignty respected, must form the foundation of a durable settlement.

Washington could claim that its strategic objectives had been achieved, while Tehran would avoid the humiliation of capitulation.

Ultimately, the challenge is not merely to end the war, but to create a narrative that allows the United States to retreat without appearing defeated. Can The Syndicate engineer such an exit, or will America’s quest for strategic dominance further tarnish its global image?

US Midterms: The Syndicate Must Revisit Its Iran War Strategy

The November 03, 2026, US midterm elections may deliver a significant verdict on President Donald Trump and his administration. However, irrespective of whether Trump and the Republican Party win or lose, I believe Washington’s policies will remain Israel-centric, with an increasingly brutal approach towards Iran. An extensive US-Israeli air assault on Iran after the midterms remains a distinct possibility.

My verdict is unequivocal: even another round of military assaults will not change the fate of this war. The United States has already lost strategically, having failed to achieve its declared objectives. Military superiority and the ability to inflict enormous destruction do not automatically translate into victory.

Ironically, the Trump administration has not swallowed this bitter reality. It continues to live under the illusion that the United States, in collaboration with Israel, can overpower Iran and compel it to surrender. This refusal to acknowledge strategic failure could lead Washington into another costly military adventure.

The prolonged, yet non-yielding, war has given Iran considerable time to revamp its military strategy and strengthen its strategic relationships with China and Russia. Although there is little discussion of this evolving cooperation in conventional and social media, its implications for the regional balance of power should not be underestimated.

Meanwhile, Arab allies hosting US military bases have had a bitter experience. Their critical assets have remained vulnerable, raising serious questions about the United States' ability to protect its regional partners. The presence of American military installations has not provided the security guarantees these countries had expected.

In my opinion, the time has come for “The Syndicate” to revisit its US war strategy. I can understand that even the Syndicate is not prepared to accept American defeat. However, refusing to acknowledge reality will only compound the consequences of strategic miscalculation.

Today, I suggest that Washington de-escalate, or even retreat, and take time to devise a new strategy. It must remember that the maximum-pressure policy has failed. Continuing to pursue the same approach while expecting a different outcome is an exercise in strategic adventurism.

A new, accommodating policy towards Iran is essential to ending this prolonged confrontation and the energy crisis it has unleashed. Global economies, including the US economy, are paying a heavy price.

The United States must recognize that another military assault cannot reverse a strategic defeat. The time has come to abandon the illusion of overpowering Iran and pursue a policy that can bring this war to an end.

Estimating the Damage to US Strategic Facilities in the Middle East

The US administration has remained reluctant to disclose the financial cost of its war against Iran, which began on February 28, 2026. An equally important question remains unanswered: why is Washington avoiding a comprehensive disclosure of the damage inflicted on its military installations across the Middle East?

An Associated Press investigation, based on satellite imagery and interviews with regional officials, provides a revealing account. Through August, more than 115 Iranian or Iranian-backed drone and missile strikes had damaged or destroyed structures at 26 military bases and other sites housing US equipment.

Iran's strategy was particularly significant. Rather than limiting its retaliation to conventional military installations, Tehran initially concentrated on early-warning radars and systems designed to detect incoming attacks. These included strategically important facilities in Kuwait, Bahrain, Saudi Arabia, Jordan and Qatar.

The consequences were substantial. At least 15 US aircraft were reportedly damaged, while aircraft hangars, refuelling tankers, communication systems, fuel bunkers, troop accommodation and other infrastructure suffered considerable damage. One sophisticated radar system destroyed in Jordan was among only 13 possessed by the US Army globally, with an estimated replacement cost of around US$500 million.

Kuwait's Ali Al Salem Air Base was reportedly struck at least 30 times, damaging or destroying 15 aircraft hangars. Camp Buehring also sustained extensive damage.

More importantly, the US has reportedly moved aircraft, air defence systems, communications equipment and other military assets away from the Persian Gulf. This raises questions about the resilience of America's military presence and the credibility of its security commitments in the region.

Washington frequently invokes operational security to justify withholding information. However, prolonged silence also invites speculation about the actual scale of losses and the enormous expenditure required to restore damaged facilities. Replacing sophisticated military equipment and rebuilding infrastructure could cost billions of dollars and potentially take several years.

The Trump administration must also recognize that another round of hostilities could expose remaining American installations to further retaliation, adding to the financial and strategic burden.

The larger lesson is that expensive military infrastructure does not guarantee security against relatively inexpensive drones and precision-guided missiles. As Raphael Cohen, a RAND analyst, observed, the changing nature of warfare makes all militaries vulnerable to large-scale, low-cost drone attacks.

America must explain not only how much it spent prosecuting this war but also the extent of damage to its strategic infrastructure and the estimated cost of restoring it. Withholding the figures cannot erase the damage or its long-term strategic consequences.

PSX benchmark index up 2.5%WoW

Pakistan Stock Exchange (PSX) staged a recovery during the outgoing week due to rejuvenation of diplomatic engagement to resolve the Middle East conflict, and higher than expected corporate earnings announced during the ongoing result season. The benchmark Index gained 4,034 points or 2.5%WoW to close at 166,409 on Friday, October 30, 2026. The average daily trading volume surged by 121%WoW to 1,095 million shares.

Driving the diplomatic momentum were Pakistan-proposed talks in Tehran between the Makkah Pact states and Iran, alongside reports of renewed US outreach to Iran ahead of the US midterm elections.

Meanwhile, supply concerns fueled by Houthi attacks on Saudi Arabia and tanker incidents near the Strait of Hormuz kept Brent crude elevated, up 0.7%WoW at US$117.1/ bbl as of Friday.

On the macroeconomic front, State Bank of Pakistan (SBP) raised the policy rate by 50bps to 12.0% (its first hike since April), while raising its FY27 remittances forecast to US$45 billion from US$44 billion and foreign exchange reserves forecast to US$23 billion end December 2026 and US$25 billion for end June 2027.

The SBP raised PKR1.8 trillion in the latest T-bills auction against a target of PKR1.7 trillion, with cut-off yields rising by 25-61bps across tenors.

Foreign exchange reserves held by SBP rose to US$21.5 billion as of October 23, 2026.

Other major news flow during the week included: 1) The US Federal Reserve holds interest rates steady, 2) Pakistan considers raising US$500 million via a second Panda bond in 2HFY27 without ADB/ AIIB guarantees, 3) Pakistan secures third LNG cargo from Qatar in October, 4) SIFC lines up US$40 billion investment pipeline across 38 projects, including a proposed US$6 billion refinery program, and 5) Pakistan seeks new US$600 million World Bank loan tied to structural and trade reforms.

Top performing sectors were Leasing, Transport, and Tobacco, while the lagged included Paper & Board, Apparel, and Jute.

Major net buyers were Other Organizations (US$50.9 million) and Individuals (US$7.3 million), major net sellers were Foreigners (US$60.6 million) and Insurance Companies (US$4.0 million).

Top performing scrips were: GHNI, CNERGY, TGL, KOHC, and COLG, while laggards included: PKGS, INIL, LCI, AGP, and IMAGE.

AKD Securities expects the market to improve on the back of strengthening economic indicators. Any positive development on Middle East conflict could moderate international oil prices and serve as a key trigger for market as it paves the way for monetary easing.

The market continues to trade at attractive valuations, with forward P/E of 6.0x.

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

Trump Must Not Make the Mistake of Attacking Iran Again

The US-Israel war on Iran, which began on February 28, 2026, should have taught President Donald Trump an important lesson: military superiority does not automatically translate into strategic victory. Yet reports suggest that the administration is considering another assault on Iran after the November 3 midterm elections. Trump must not repeat the mistake of launching another military offensive.

The financial cost alone should prompt serious reconsideration. According to the latest Pentagon estimate, the war has cost American taxpayers approximately US$47.1 billion through October 16. This figure does not include the full cost of repairing damaged US military installations in the region. After spending this staggering amount, Washington has failed to bring Iran to its knees. Instead, the conflict has raised questions about American military deterrence and tarnished the country's international image.

Senator Chris Murphy, after attending a classified briefing on possible renewed military operations, described the administration's proposed plan as "insane". He warned that another assault could trigger devastating escalation, prolong the conflict and undermine America's commitment to the rule of law. His concerns deserve attention, particularly given reports that Iranian energy infrastructure, military installations and nuclear facilities feature among potential targets.

Trump must understand that the longer this confrontation continues, the greater the damage to American credibility. Further attacks may not weaken Iran's resolve; they could reinforce its determination to resist external pressure. Indeed, imprudent American policies risk turning Iran into an even bigger strategic specter, while Arab allies increasingly question the security guarantees offered by Washington.

The Gulf states have already experienced the consequences of being drawn into a confrontation involving their territory and security interests. Their growing uncertainty should not be mistaken for unconditional support for another American military adventure.

Meanwhile, China and Russia are gradually expanding their diplomatic and strategic engagement in the region. Every prolonged American miscalculation creates additional space for these powers to challenge Washington's traditional influence. The erosion of US hegemony in the Middle East may therefore become an unintended consequence of its own policies.

The reported diplomatic outreach by Vice President JD Vance offers an opportunity to reconsider the course of action. Washington should pursue negotiations rather than another bombing campaign. Iran's Foreign Minister Abbas Araghchi has also reiterated Tehran's willingness to pursue a peaceful resolution, while insisting on its right to defend itself.

Trump should recognize that ending a war without achieving every military objective is not necessarily defeat. Launching another military offensive without a credible exit strategy could prove far costlier. It may further weaken American credibility, undermine the confidence of Arab allies and hasten the end of US hegemony in the Middle East.

Will Netanyahu Accept Defeat?

Benjamin Netanyahu’s possible defeat would be more than the political downfall of Israel’s longest-serving prime minister. It could expose personal vulnerabilities, unsettle hardline allies, affect defence-related interests and challenge a wider network of political influence that I describe as “the syndicate.”

The first issue is Netanyahu’s personal future. Facing corruption charges since his indictment in 2019, he has a legal battle that losing office would not automatically resolve in his favour. Although imprisonment is not an inevitable consequence of electoral defeat, the prospect of losing political influence could make his future considerably more uncertain. His political survival and legal predicament therefore form an important part of the debate.

The second issue concerns Israel’s hardliners. Netanyahu has been central to the coalition politics that enabled right-wing and religious parties to exercise considerable influence over government policy. His departure could leave some of these allies without their principal political broker, forcing them to reconsider their strategy and search for alternative leadership.

The third dimension involves the military-industrial complex. Prolonged regional conflicts have sustained demand for weapons and defence technology. A change of government would not necessarily weaken Israel’s defence industry, but it could alter procurement priorities, strategic calculations and the political justification for military operations.

The fourth and most consequential dimension is what I call “the syndicate” - a wider network of political, strategic and economic interests whose objectives may overlap with Netanyahu’s continued leadership. His close relationship with Donald Trump adds an international dimension to this argument. Whether Netanyahu’s departure would constitute a setback for this wider network, however, depends on how far its interests are tied to him personally rather than to institutions and policies that could survive his departure.

The central question is whether Netanyahu would accept not only an electoral verdict but also the consequences of losing power. Israel’s parliamentary system makes coalition negotiations crucial, while the judicial process would continue to follow its own course.

Ultimately, Netanyahu’s political future will depend on voters, coalition arithmetic and the legal process. But the implications of his departure could extend well beyond one individual. The real test would be whether Israel’s political system can manage a change of leadership while holding its leaders accountable—and whether the interests built around Netanyahu could retain their influence without him.

US and EU Adapting Divergent Policies to Tackle Energy Crisis

The United States and the European Union appear to be pursuing divergent energy policies, exposing the tension between geopolitical commitments and economic necessities. While Washington is easing restrictions to facilitate Russian diesel supplies, Brussels is preparing another package of sanctions against Russian entities involved in the energy trade. Why are two Western partners responding so differently to energy insecurity?

The answer lies in their contrasting energy circumstances, domestic political pressures and strategic priorities.

The United States is facing a sharp rise in diesel prices, which reached US$6.32 per gallon on October 23, compared with US$3.63 a year earlier. With Brent crude approaching US$120 per barrel amid escalating Middle Eastern tensions, the pressure on President Donald Trump is mounting ahead of the November 3 midterm elections. His decision to facilitate Russian diesel supplies reflects an attempt to contain domestic fuel costs, even if it requires a pragmatic departure from the sanctions approach.

The first Russian tanker, carrying approximately 40,000 tons of diesel, is not expected to reach New York until November 7. Moreover, the shipment is too small to make a meaningful difference to a tight global diesel market. The agreement's immediate political significance may therefore exceed its practical impact on American consumers.

Interestingly, the US natural gas market presents a contrasting picture. Henry Hub futures have fallen to US$2.66 per million British thermal units (MMBtu), as abundant inventories, mild weather and recovering supplies outweigh strong liquefied natural gas demand. The United States faces expensive diesel even as domestic natural gas remains relatively cheap.

Europe, meanwhile, faces a serious natural gas challenge. Its benchmark TTF prices have climbed above €93 per megawatt-hour, their highest level since December 2022. Restricted Qatari LNG supplies, colder weather and storage levels below 75% have heightened concerns about winter energy security. Yet the EU is preparing further sanctions targeting Russian oil producers, refiners, traders and shipping entities.

This divergence reflects different calculations of economic necessity and geopolitical responsibility. Washington is prioritizing immediate domestic pressures, while Brussels remains committed to restricting Moscow's energy revenues following Russia's invasion of Ukraine. Both approaches involve trade-offs between strategic objectives and energy security.

Ultimately, energy markets do not respect political boundaries. If Washington is willing to reconsider restrictions when domestic needs demand it, Europe must also assess how its sanctions policy balances geopolitical objectives against economic resilience. The central question is whether political commitments can remain sustainable when the cost of energy security becomes increasingly difficult for consumers and businesses to bear.

US Faces a Worse Defeat in Iran Than in Afghanistan

The United States may be heading towards a strategic setback in Iran more consequential than its humiliating withdrawal from Afghanistan. The two conflicts differ fundamentally in their military, political and geographical realities. Afghanistan exposed the limits of American nation-building; Iran could expose the limits of American military coercion.

In Afghanistan, Washington had important advantages. Its 2001 military campaign relied heavily on the Northern Alliance, an indigenous force opposed to the Taliban government. American airpower, special operations forces and local allies rapidly brought down the Taliban regime.

Subsequently, Washington installed and supported a government that provided the political framework for a prolonged American military presence. Regional cooperation and access to supply routes enabled the United States to sustain its operations despite Afghanistan being landlocked. Yet, after two decades of intervention, the US-backed government collapsed in August 2021, forcing American forces to withdraw.

Iran presents a different strategic equation. Washington has no comparable indigenous force capable of readily replacing the Iranian government, nor can it assume that military pressure will produce political fragmentation. Iran possesses established state institutions, substantial military capabilities and the geographical advantage of being positioned along the Strait of Hormuz, a vital artery of global energy trade.

American military bases in GCC countries provide platforms for repeated air strikes. However, the ability to attack Iran from neighbouring territories is not equivalent to the ability to occupy its land, establish a sustainable military presence or impose a political settlement. After months of confrontation, the absence of an American ground presence inside Iran underscores the difference between possessing overwhelming firepower and translating it into control on the ground.

More importantly, external aggression can produce consequences contrary to those intended. A nation divided over domestic policies may still unite against a foreign adversary. Iran's national cohesion should not be taken for granted, but neither should Washington assume that military devastation will automatically trigger political surrender.

The ultimate test is not how many targets American forces destroy, but whether Washington can achieve its declared objectives at an acceptable military, economic and political cost.

Afghanistan demonstrated that military victory does not guarantee a sustainable political outcome. Iran could deliver an even more damaging lesson - a superpower may win battles, inflict enormous destruction and still lose the strategic contest. If Washington cannot translate its military superiority into a durable settlement on its terms, its eventual outcome in Iran could prove worse than Afghanistan.

Trump’s Louder Rhetoric and the Limits of American Power

The louder Donald Trump’s rhetoric becomes, the more pressing a question emerges: has the US-led war on Iran delivered the strategic outcomes Washington promised? Military power can inflict enormous damage, but translating battlefield superiority into political submission is an altogether different challenge.

The decision to attack Iran while diplomatic negotiations were under way undermined the credibility of diplomacy itself. If negotiations can be interrupted by military action, what assurance can any adversary have that future American commitments will be honoured? The consequences extend beyond Tehran, weakening confidence in Washington as a negotiating partner.

The reported killing of Iran’s spiritual leader appears to have failed to produce the anticipated political transformation. Rather than compelling the Iranian leadership to surrender, the campaign has confronted the US with the resilience of a state whose institutions and national interests cannot simply be eliminated through targeted strikes.

At the outset, expectations were raised that the conflict would be short-lived. Yet a prolonged confrontation without Iranian unconditional surrender raises serious questions about the assumptions underpinning the military campaign. Escalating threats may project determination, but they cannot substitute for a credible exit strategy.

The Gulf Cooperation Council (GCC) countries face their own strategic dilemma. If their military installations are perceived as serving Israel’s security more directly than their own, the political justification for hosting foreign forces becomes increasingly contentious. Regional security arrangements cannot remain sustainable without the confidence of host countries and their populations.

The Strait of Hormuz presents another contradiction. Restricting Iranian oil exports may impose costs on Tehran, but disruption to maritime trade also threatens Arab oil producers through reduced export opportunities, higher transport costs and uncertainty over energy revenues. Economic pressure is rarely a one-sided instrument.

Meanwhile, Iran’s ability to withstand the campaign may reinforce perceptions of its military resilience and regional influence, regardless of the physical damage it has suffered.

Reports of Trump seeking Russian diesel supplies would add another uncomfortable dimension if confirmed, even a superpower can face practical vulnerabilities when geopolitical confrontation disrupts energy markets.

Ultimately, the measure of American power is not the volume of presidential rhetoric but the ability to achieve sustainable political objectives. If coercion fails to secure submission, Washington must reconsider whether escalation is strengthening its position—or exposing the limits of military supremacy.

PSX benchmark index declines 2.4%WoW

Pakistan Stock Exchange (PSX) experienced volatility during the outgoing week amid continued Houthi attacks on Saudi Arabia, with news of the US planning an attack on Iran after midterm elections.

The benchmark Index declined by 4,045 points or 2.4%WoW to close at 162,375 on Friday, October 23, 2026. Average daily trading volume declined by 13.4%WoW to 496 million shares.

Brent crude futures climbed by 6.4%WoW to US$114.9/ bbl as of Friday. Meanwhile, local HSD and Petrol prices declined attributed to a decline in refinery crack cap by authorities and relatively stable Dubai crude oil prices.

On the macroeconomic front, FY26 GDP growth revised slightly down to 3.65% from provisional estimates of 3.7% as compared to 3.1% in FY25.

The World Bank projected FY27 GDP growth at 3.8% and inflation at 8.2% (7.1% in FY26).

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased to US$21.49 billion as of October 16, 2026.

Banking sector deposits rose 16%YoY to PKR40.8 trillion at end September 2026.

Consumer auto financing increased 33.6%YoY to PKR407 billion in September 2026 (up for the 22nd consecutive month).

Urea offtakes rose 42%YoY to 611,000 tons in September 2026 amid channel inventory build-up ahead of the Rabi season, whereas DAP offtakes declined 30%YoY to 68,000 tons amid higher local prices.

Power generation grew 6%YoY in 1QFY27 amid recovery in electricity consumption.

Cotton arrivals increased 8%YoY to 4.1 million bales as of October 15, 2026.

Other major news flow during the week included: 1) Finance Minister sought Fitch’s view on what Pakistan needs to move into the BB rating category, 2) Prime Minister approved the draft of Auto Policy for five years, 3) Weekly SPI rose 0.65%WoW and 11.85%YoY, 4) Privatization Commission pre-qualified 10 bidders for IESCO, and 5) Power sector circular debt rose to PKR1.7 trillion, while gas sector liabilities increased to PKR3.6 trillion as of Jun 30, 2026.

Top performing sectors were: Modarabas, Sugar & Allied Industries, and Leasing Companies, while laggards included: Refinery, Technology and Communication, and Woolen.

Major net selling was recorded by Mutual Funds (US$10.2 million) and foreigners (US$5.7 million), while major buyers were Individuals (US$14.0 million.

Top performing scrips were: THCCL, UPFL, PSEL, TPLRF1, and BWCL, while laggards included: PTC, PGLC, AHCL, ATRL, and KAPCO.

AKD Securities expects the market to improve on the back of strengthening economic indicators.

The brokerage house expected upcoming MPC meeting as a major catalyst and predicts the central bank to maintain the status quo.

Any positive development on Middle East conflict could moderate international oil prices and serve as a key trigger for market as it paves the way for monetary easing.

The 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-Iran War: Will Trump Pay the Price at the Midterms?

The US–Iran war may become President Donald Trump’s biggest political liability ahead of the November 3 midterm elections. Two contrasting outcomes are possible: Republicans could gain seats if Trump delivers a convincing victory, or lose ground if voters blame him for an inconclusive war, soaring energy costs and economic uncertainty. The balance appears to favour the second scenario.

Trump’s approval rating has fallen to a record low, while rising gasoline prices and disruptions to global energy supplies are adding to public discontent. The effective closure of the Strait of Hormuz has complicated Washington’s efforts to stabilize oil markets, while the absence of a credible exit strategy raises questions about the war’s ultimate objectives.

Iran, too, appears to understand the political stakes. By keeping negotiations alive without rushing towards a settlement, Tehran hopes to deny Trump a diplomatic victory before the elections. Its calculation is straightforward - the longer the conflict continues, the greater the potential political cost for the White House. Yet this strategy is not without risks, as sanctions, the US maritime blockade and economic hardship are also hurting Iran.

The real battlefield may therefore be shifting from Iran to the American ballot box.

For Democrats and other defenders of institutional checks and balances, the midterms offer an opportunity to curb Trump’s political power. Having failed to remove him through impeachment, his opponents may seek to achieve through elections what they could not accomplish through Congress’s removal process.

A Democratic victory would not dislodge Trump from the presidency, but control of either chamber could strengthen congressional oversight, obstruct parts of his legislative agenda and intensify scrutiny of his conduct of the war.

My assessment is that Republicans face a greater risk of losing seats than making significant gains. American voters may be less interested in claims of military success than in the cost of the conflict, its uncertain outcome and its impact on their daily lives.

The November 3 elections could thus deliver a powerful message - a president may initiate a war, but he cannot dictate how voters judge its consequences.

Mehrdad Akhlaqi Ketabchi New Defence Minister of Iran

According to Reuters, Iran's parliament approved Mehrdad Akhlaqi Ketabchi as defence minister on Sunday, ending months of interim leadership at the ​ministry and placing a former defence sector veteran in ‌charge of the country's defence production and procurement apparatus.

Akhlaqi replaces Majid Ebn al-Reza, who took over in an interim capacity after then Defence Minister Aziz Nasirzadeh ​was killed by US-Israeli strikes in February.Akhlaqi has spent decades ​in Iran's defence industry and has held senior roles ⁠in its aerospace and missile sectors. He is subject to US ​and EU sanctions over his work in Iran's defence sector.

In a program ​presented to lawmakers, Akhlaqi pledged to rebuild the country's military-industrial infrastructure, accelerate the development of defence technologies and expand cooperation with private-sector companies.

"If the American enemy ​makes another miscalculation, the response of the valiant Iranian people and ​the fighters of Islam will be surprising and extensive," he said, adding that ‌Tehran ⁠had taken necessary measures to counter the potential use by the US of its "mother of all bombs" against Iran.

CNN reported this week that the US has developed strike plans that could include using the GBU-43/B ​Massive Ordnance Air ​Blast Bomb, also ⁠known as the "mother of all bombs", against Iranian energy infrastructure and nuclear sites if President Donald Trump ​orders renewed combat operations.

The weapon is the largest non-nuclear ​bomb ⁠in the US arsenal.

"The US President should focus on ensuring his forces are withdrawn safely from our region. If he drops a single bomb, ⁠he ​will have to see how many of ​his troops end up being carried out of the region in a horizontal position," ​Akhlaqi said.

US may use mother of all bombs on Iran

According to a CNN report, the US military has developed strike plans ​that could include using ‌the so-called "mother of ​all bombs" to target Iranian energy ⁠infrastructure and nuclear sites ​should President Donald Trump ​order renewed combat operations.

The potential deployment of the GBU-43/B Massive Ordnance Air Blast Bomb, the largest ‌non-nuclear ⁠bomb in the US arsenal, would mark a significant escalation in the ​conflict, ​although ⁠officials familiar with military planning discussions ​told CNN questions remain ​over ⁠its effectiveness in achieving Washington's strategic objectives.

Trump is facing pressure to bring an end to the deeply unpopular war, as Republicans brace for potential political backlash from voters in the upcoming midterm elections and there is little indication the two countries are close to a negotiated resolution after more than six months of US bombing.

While the US military continues to provide Trump with options for potential strikes against outstanding Iranian targets, some officials continue to privately question whether the White House has a strategy that incorporates those plans in a way that could actually end the war.

For months, Trump and his advisers have discussed options that could act as a “definitive” end to the war, aware of how unpopular the conflict has become among Americans.

While some administration figures have characterized the war as essentially won, Trump has been more guarded in recent remarks, stopping short of declaring victory and saying the US still has unfinished business in the country.

Behind the scenes, Trump has also cast doubt on some outside allies who have encouraged him to simply bring US troops home and move on. Doing so, Trump has argued, would look like defeat.

Over the course of the last several weeks, White House advisers have held meetings to discuss various options for Iran. While Trump announced publicly that he would not take new actions before the midterms, several advisers said privately they didn’t know whether that statement was definitive or could change before election day.

Trump has ordered the military to develop additional strike packages against Iranian targets that include “a lot of energy infrastructure” and the potential use of a MOAB, one of the sources told CNN.

The phrasing used was that this attack would come “prior to US retrograde in CENTCOM AOR (area of responsibility),” indicating the administration could launch the additional strikes, attempt to declare victory and quickly pull everyone out.

A second source said military plans for striking Iranian nuclear sites, including Pickaxe Mountain, also explicitly call for using the MOAB. In recent months, Trump has repeatedly threatened to strike Pickaxe, where the US and Israel believe Tehran has stored components of its nuclear program, even after pausing full combat operations earlier this year, and Trump continues to emphasize that his goal is to ensure Iran never obtains a nuclear weapon.

Another US official noted that when the military plans, it develops a menu of options for policymakers that range from the high-end to low-end. Higher-end targets, including those that are located deep underground, require bigger bombs, and the MOAB is the biggest.

But there are questions around whether the MOAB would be an effective munition to use against Iran’s nuclear facilities and other sites that are located deep underground. While the GPS-guided bomb is capable of destroying an area equivalent to nine city blocks, it likely lacks the capability to penetrate deep enough under the surface to destroy the suspected nuclear facilities at Pickaxe, which is believed to be fortified by layers of granite, and other remaining Iranian nuclear sites.

Many within the administration as well as outside analysts agree that the only way to decisively defeat Iran would be through a major operation involving ground troops, a commitment that could potentially cost thousands of American lives. The Pentagon considers all scenarios, so those plans exist, but as of now no one in the administration is arguing for such drastic action.

Trump has indicated he has little interest in putting US boots on the ground in Iran but his desire to end the conflict as soon as possible presents a political dilemma for a president who is keenly aware of how unpopular the war has become yet has been unable to secure a diplomatic agreement that would bring it to a close.

Top Trump administration officials and military planners have been focused, for weeks, on finding an off-ramp that gives Trump a “symbolic” win — at minimum — he can try to sell to the American people without preventing a potential diplomatic breakthrough, starting with an agreement to reopen the Strait of Hormuz, CNN has reported.

A fourth source familiar with the Pentagon’s recent planning discussions on Iran told CNN that military officials had developed some options that would amount to a “fireworks show,” with the goal of providing Trump an off-ramp from the conflict even if those strikes fail to accomplish his stated goals for starting the war in the first place.

And despite Trump’s recent pledge to hold off on launching additional strikes before the midterms, the US military already appears to be preparing for potential Iranian retaliation should the president give the go-ahead.

The next turnover of US troops deployed to CENTCOM is also expected to take place within the next few weeks, a US official who acknowledged it is possible some of the personnel who rotate out of the region, may not be replaced by fresh service members.

 

PSX benchmark index closes almost flat WoW, despite volatility

Pakistan Stock Exchange (PSX) witnessed volatility during the week ended on October 16, 2026, due to political uncertainty and persistent geopolitical tensions in the Middle East. The Index declined by 670 points to close at 166,420, down 0.4%WoW.

Brent crude price remained elevated amid continued disruptions to energy supplies through the Strait of Hormuz and renewed attacks on Saudi energy infrastructure.

On the macroeconomic front, Pakistan recorded a current account deficit (CAD) of US$356 million in September 2026, as compared to a surplus of US$123 million during the same period last year, reflecting some added pressure on the external account.

Remittances by overseas Pakistanis rose 13%YoY in September 2026 to US$3.6 billion.

The GoP raised PKR660 billion through the latest T-Bills auction, with yields remaining broadly stable following the sharp repricing in the previous auction.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased to US$21.47 billion as of October 09, 2026.

Passenger car sales declined by 9.8%YoY to 10,939 units in September 2026.

Textile exports grew by 5.2%YoY during 1QFY27, led by growth in ready-made garments, knitwear and cotton yarn.

Other major news flow during the week included: 1) FBR collection exceeded Q1 collection target, 2) IMF projected Pakistan’s GDP growth at 3.5% for FY27, while forecasting inflation at 9.9%, 3) Pakistan received first LNG cargo of October, 4) Refineries produced 92,482 tons of LPG in July-August, and 5) RDA attracted US$251 millio in September.

Leasing companies, Woolen, and Jute remained top performing sectors, while laggards included:  Apparel, Technology & Communication, and Transport.

Major selling was recorded by Mutual Funds amounting to US$10.7 million. On the contrary, major net buyers were Banks (US$8.3 million) and Companies with US$6.7 million.

Top performing scrips were: BNWM, AGP, IMAGE, BML, and JDWS, while laggards included: POL, PTC, APL, CPHL, and THCCL.

AKD Securities expects the market to improve on the back of strengthening economic indicators. Additionally, easing inflationary pressures would reduce probability of monetary tightening. Moreover, any positive development on Middle East conflict could moderate international oil prices and serve as a key trigger for market as it paves the way for monetary easing.

The 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.