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 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.

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

 

The Whole World Is Losing, Except the US

My point is clear, the United States must acknowledge defeat, ensure the full reopening of the Strait of Hormuz, lift economic sanctions on Iran, and compensate for the losses incurred during this war. Enough time has passed, and there is no justification for portraying defeat as victory.

The ongoing negotiations between the United States and Iran are increasingly becoming a rhetorical exercise rather than a strategic achievement. The ambitious campaign launched in coordination with Israel to curb Iran’s regional influence and nuclear development has failed to accomplish its stated objectives.

It would not be incorrect to say that Iran’s regional significance has increased, its negotiating posture has become more assertive, and its capacity to withstand economic pressure has proven far stronger than anticipated. After weeks of diplomacy, fundamental differences remain unresolved due to US intransigence, leaving the talks far from any meaningful breakthrough.

The situation in and around the Strait of Hormuz underscores US miscalculations and Iran’s leverage, while exposing the vulnerability of oil-exporting countries that rely heavily on American security guarantees. The US blockade of the Strait has reduced the daily movement of approximately 140 vessels to only a handful of oil and LNG carriers.

The consequences have been staggering. Oil-exporting Arab states are facing uncertain revenues, while energy-importing economies are grappling with inflationary pressures and severe supply disruptions.

Despite these grim realities, Washington’s rhetoric continues to speak of progress and opportunity. Such claims stand in stark contrast to the facts and appear to be an attempt to reframe strategic underperformance as diplomatic success. This only reinforces the perception of a policy being pursued without clear goals, direction, or achievable objectives.

The central point is now unmistakable - the longer the truth is denied, the greater the price the rest of the world will be forced to pay.

 

Invisible Hand Behind Iran War

The latest round of hostilities involving Iran, Israel, and the United States raises a question that mainstream discourse appears reluctant to confront: if elected leaders are truly in control, why do military actions so often proceed in defiance of political declarations?

President Donald Trump publicly urged restraint and claimed that he "calls all the shots." Yet Israeli strikes followed almost immediately. The episode exposed a contradiction that has become increasingly common in international politics. Governments speak the language of diplomacy while military escalation continues unabated.

Perhaps the real issue is not whether Washington controls Tel Aviv or vice versa. The more important question is whether both are operating within a framework dictated by interests far larger than individual politicians.

For decades, every major crisis in the Middle East has produced the same winners. Defense industries secure larger contracts. Security establishments gain expanded powers. Energy markets remain vulnerable to disruption. Strategic planners find justification for maintaining military footprints across the region. Meanwhile, ordinary citizens pay the price through economic hardship, displacement, and insecurity.

Iran has become the latest target of this entrenched system. Officially, the objective is to halt Tehran's nuclear ambitions and neutralize its missile capabilities. Yet the scope of military pressure suggests broader ambitions. The weakening of the Iranian state, the containment of its regional influence, and perhaps even the eventual collapse of the current political order appears to be equally important goals.

The implications extend beyond the Middle East. Any disruption involving the Strait of Hormuz threatens global energy flows and places additional pressure on emerging economies. China, one of the largest consumers of Iranian energy, stands to lose from prolonged instability. In this context, the conflict increasingly resembles a chapter in a wider geopolitical contest rather than a narrowly defined security operation.

What makes the situation particularly troubling is the growing irrelevance of public accountability. Leaders change, governments come and go, yet the direction of policy remains remarkably consistent. Escalation follows escalation, regardless of electoral promises or diplomatic rhetoric.

One does not need to believe in secret conspiracies to recognize this pattern. A powerful nexus of military, economic, and geopolitical interests has repeatedly demonstrated its ability to shape outcomes. Whether it is called an establishment, a strategic network, or an informal cartel of influence, its fingerprints are visible across the region.

The tragedy is that while nations debate who fired the latest missile, few ask who benefits from a conflict that never seems to end.

Trading at PSX driven by US-Iran conflict

The benchmark Index of Pakistan Stock Exchange (PSX) continued its positive momentum in May 2026 for the second consecutive month as the US and Iran moved closer to clinching a deal. The absence of additional revenue measures in the upcoming budget, amid the uncertainty created by the recent US-Iran conflict boosted investors’ confidence. Technology, Cement, and OMC sectors delivered the strongest positive returns while refineries remained negative during the month under review.

The Index continued its positive momentum for the second consecutive month as the US and Iran moved closer to clinching a deal that could pave the way for the reopening of the Strait of Hormuz. Consequently, the Index gained 6.7% (6.8% in US$ terms) during May. However, market liquidity contracted by 20.6% on sequential basis as average daily traded volume declined to 929 million shares from 1,170 million shares in April 2026 due to Eid effect. Average daily traded value also dropped by 22.2% to PKR41.8 billion (US$150 million) from PKR53.7 billion (US$192.7 million) in April 2026.

The absence of additional revenue measures in the upcoming budget, amid the uncertainty created by the recent US-Iran conflict boosted investor confidence. Analysts expect the government's focus to remain on increasing revenue through enforcement measures while curtailing expenditures, which would continue to be the mainstay of its fiscal strategy.

Pakistan’s role as a mediator in the ongoing US-Iran conflict supports the view that the country’s increasing importance in the GCC is likely to improve its global standing and help attract foreign investment. However, any adverse development in the US-Iran conflict could become a source of concern for investors.

Technology, Cement, and OMC sectors delivered the strongest positive returns, driven by improving IT exports, continued robust domestic demand, and higher inventory gains. The Technology sector posted a return of 15.6% in May, followed by OMCs and Cement, which generated returns of 10.7% and 10.0% respectively. The Fertilizer sector also reported a strong return of 8.8%, supported by healthy offtakes and attractive dividend yields. As against this, Refineries sector posted a negative return of 1.2% during the month following the government's decision to fix margins on certain petroleum products to provide relief to consumers.

Insurance and Brokers remained net buyers in May, accumulating equities worth US$12.8 million and US$5.5 million, respectively, amid expectations of a US-Iran deal. Conversely, Companies, Banks, and Mutual funds remained net sellers as funds shifted toward fixed-income securities following policy rate increase by the central bank in April 2026. Foreign investors also remained net sellers due to geopolitical tensions and rising concerns over currency depreciation across emerging and frontier markets amid inflationary pressures in developed economies resulting from the Middle East conflict. Net foreign selling was recorded at US$17.2 million, primarily in the banking sector (US$14.1 million), followed by the cement sector (US$5.4 million).

 

PSX benchmark index down 2.0%WoW

Pakistan Stock Exchange (PSX) remained volatile during the week ended on June 05, 2026, due to the evolving US-Iran negotiations and movements in international oil prices. The benchmark Index was down 3,484 points or 2.0%WoW to close at 170,479 on Friday.

Investor sentiment weakened at the start of week on the news of probable halt in US-Iran talks after Israel attacked Lebanon, and inflation came in above policy rate at 11.7%YoY, taking real interest rates into positive territory after 26 months. Brent crude was up 5.9%WoW to US$98.9/ bbl.

On the macroeconomic front, Pakistan's trade deficit for May 2026 decreased by 14%YoY and 39%MoM to US$2.6 billion, led by 6.6%YoY and 21%MoM decrease in imports.

FBR's provisional tax collection for 11MFY26 was reported at PKR11.2 trillion, reflecting a shortfall of PKR25 billion against the revised target.

Foreign exchange reserves of State Bank of Pakistan (SBP) increased to US$17.2 billion as of May 29.

Cement dispatches for May 2026 declined by 21%YoY to 3.8 million tons, mainly due to Eid holidays amid higher fuel prices

OMC offtakes declined by 23%YoY to 1.17 million tons during the month, led by lower HSD offtakes.

Other major news flow during the week included: 1) GoP announced PKR290/ US$ exchange rate for the FY27 budget, alongside a GDP growth of 4% and inflation, 2) Pakistan secured three Qatari and one spot LNG cargo, 3) FCC questioned Punjab's royalty levy on cement, 4) OGDC made an oil and gas discovery at Bobi Deep-1, and 5) NEPRA approved a PKR1.99/unit relief.

Top performing sectors were: Synthetic & Rayon, and Modarabas, while laggards included: Power Generation, Oil & Gas Exploration, and Vanaspati & Allied Industries.

Major selling was recorded by Mutual Funds of US$19.5 million, while buying was recorded by Individuals of US$16.5 million. Top performing scrips were: HCAR, PSX, GHNI, IBFL, and PGLC, while laggards included: GHGL, NBP, APL, ENGROH, and PKGS.

According to AKD Securities a constructive resolution to the US-Iran conflict, alongside the trajectory of international oil prices, would remain the pivotal near-term catalysts for market direction.

The upcoming FY27 federal budget, scheduled for June 10, would remain a key focus for the market. 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.

When Rules Apply Only to Adversaries

The United States frequently speaks of a rules-based international order. Yet recent events involving Iran raise a fundamental question: are these truly universal rules, or merely rules that apply to America's adversaries?

The contradiction is becoming increasingly difficult to ignore. When Washington launches military strikes, the action is described as self-defense, deterrence, or a contribution to regional security. When Iran retaliates, the same commentators who justified the initial strike suddenly discover the dangers of escalation. Cause and effect disappear from the discussion. The response becomes the story, while the action that provoked it is conveniently forgotten.

The ceasefire narrative offers an even clearer example. If a ceasefire is violated, responsibility should logically rest with whoever broke it first. Instead, the international audience is often presented with a distorted version of events in which retaliation becomes the principal crime and the preceding action fades into the background. Such a narrative does not uphold peace; it merely protects one side from scrutiny.

An equally revealing contradiction surrounds American military bases in Arab countries. These installations are not humanitarian centers or cultural exchanges. They exist for one purpose: military power projection. They provide logistical support, intelligence capabilities, and operational platforms for military action throughout the region.

Yet a curious transformation occurs whenever these facilities come under threat. The military base suddenly ceases to be viewed as a military asset and is instead portrayed solely as the territory of a friendly Arab state. When attacks are launched from the base, it is considered a legitimate instrument of American strategy. When retaliation targets the same facility, it is presented as an attack on an innocent host nation.

Such arguments are not merely inconsistent; these expose the selective logic that increasingly defines international discourse.

The uncomfortable reality is that Washington's greatest challenge today is not Iran, Russia, or China. It is the widening gap between the principles it advocates and the policies it pursues. Power can compel compliance, but it cannot manufacture credibility. Every time one standard is applied to allies and another to adversaries, the claim of defending a rules-based order becomes less convincing.

The world is not questioning America's power. It is questioning whether the rules Washington promotes are genuinely universal or simply another instrument of that power.

Ceasefire Diplomacy or Managed Conflict?

Every morning brings fresh reports suggesting that the United States and Iran are inching closer to a ceasefire understanding. Yet, by evening, contradictory statements emerge, once again clouding the picture with uncertainty and strategic ambiguity. The pattern has now become too repetitive to ignore. It increasingly appears that both Washington and Tehran are buying time rather than genuinely pursuing peace, while carefully concealing their actual strategic objectives.

The initial justification for the US-Israel military campaign against Iran centered on Tehran’s refusal to accept Washington’s conditions regarding its nuclear and missile programs. However, the conflict narrative now appears to be evolving. The focus increasingly seems linked to reshaping the political architecture of the Middle East through expansion of the Abraham Accords, effectively compelling key Muslim countries, including Saudi Arabia, toward formal recognition of Israel.

Simultaneously, the continued tension surrounding the Strait of Hormuz raises another critical question. Despite repeated calls for de-escalation, there appears to be little urgency in Washington to fully restore normal maritime stability in the region.

Such instability serves multiple strategic purposes for the United States. It constrains oil exports from Gulf producers, complicates China’s energy security calculations, and strengthens Washington’s leverage in global energy markets by enhancing demand for American oil and gas supplies.

The domestic political environment inside the United States also adds another dimension. Repeated but unsuccessful attempts to politically weaken or impeach Donald Trump suggest that influential power centers may still consider him indispensable in managing an increasingly volatile geopolitical environment. His aggressive foreign policy posture, particularly towards Iran and the broader Middle East, continues to align with powerful strategic interests within Washington.

Taken together, these developments indicate that the current crisis may not be moving toward immediate resolution. Instead, the world may be witnessing the management of a prolonged controlled confrontation designed to gradually exhaust Iran economically, diplomatically, and militarily until Tehran is pushed toward accepting terms that resemble unconditional surrender. Until then, ambiguity itself may remain the most effective weapon in this conflict.

Oman: Next Phase of Washington’s Strategy

After failing to secure a decisive strategic victory against Iran despite months of escalation and military pressure, Washington appears determined to restore its geopolitical credibility elsewhere in the Gulf. In this evolving power contest, Oman may increasingly find itself exposed to external pressure disguised as regional “security management.”

For decades, Oman has maintained a delicate diplomatic balance. Unlike many regional actors, Muscat preferred mediation over confrontation and dialogue over military adventurism. Yet geography has transformed the Sultanate into one of the most strategically valuable locations in the region.

The Port of Duqm and surrounding naval infrastructure are dangerously close to the Strait of Hormuz — the world’s most critical oil transit corridor. At the same time, the location places Oman within immediate strategic proximity of Iran’s Chabahar Port and Pakistan’s Gwadar Port, two emerging nodes in regional trade and connectivity. This triangle alone explains why global powers increasingly view Oman not merely as a Gulf state, but as a geopolitical gateway.

Washington’s expanding military footprint across the Gulf is often presented as a mechanism for maintaining stability and protecting maritime trade. However, history suggests that foreign military presence rarely remains temporary. Strategic access gradually evolves into political leverage, while security dependency slowly weakens national sovereignty.

Donald Trump’s confrontational posture toward Iran reflects more than ideological hostility. It also represents an attempt to demonstrate American dominance after Tehran resisted enormous economic sanctions, diplomatic isolation, and military intimidation. Direct confrontation with Iran carries enormous risks, but smaller Gulf states may appear easier arenas where Washington can project strength without triggering full-scale regional war.

This should concern every Arab emirate. The Gulf monarchies must recognize that fragmented security policies only increase dependence on outside powers. No state, regardless of wealth, can indefinitely preserve sovereignty while outsourcing its strategic defense architecture to foreign military forces.

Today the pressure may revolve around Oman and the Strait of Hormuz. Tomorrow the same logic could be applied elsewhere in the Gulf under another security pretext.

The lesson is becoming impossible to ignore - Arab states must either develop a collective regional security framework based on mutual defense and strategic independence, or continue watching external powers shape the future of the Gulf according to their own geopolitical interests.