Deteriorating US-Venezuela relations: From Reliable Crude Supplier to Adversary

For decades, Venezuela was among the most dependable suppliers of crude oil to the United States. The relationship was commercially stable and strategically important. Venezuelan heavy crude suited US Gulf Coast refineries, and American demand guaranteed steady revenues for Caracas.

The shift began with the election of Hugo Chávez in 1999, which marked the start of a new ideological era. His government moved sharply away from the earlier market-aligned policies and adopted a confrontational posture toward Washington. This included expropriating foreign oil assets, reorganizing PDVSA under political control, and forging alliances with Cuba, Russia, Iran, and later China. These steps weakened commercial ties and deepened political tensions.

Venezuela’s oil sector also deteriorated due to nationalization, mismanagement, and underinvestment. Production, once above 3 million barrels per day, fell sharply over the next two decades. As quality and reliability declined, US refiners increasingly turned to Canada, Mexico, and domestic shale producers.

Washington responded to Venezuela’s political trajectory—especially under Nicolás Maduro—by imposing sanctions targeting individuals, the oil sector, and financial transactions. These sanctions further reduced the scope for commercial cooperation and pushed Venezuela to redirect crude flows toward China and other alternative buyers. The result is a relationship now defined by distrust rather than the interdependence of earlier decades.

A parallel concern for the United States has been narcotics trafficking in the region. While Venezuela is not a major cocaine producer, it has become a significant transit route between Colombia and global markets.

US agencies have accused certain Venezuelan officials of collusion with organized crime groups. At the same time, the United States faces a domestic drug crisis driven by opioids, fentanyl, and synthetic narcotics entering through regional networks. This has elevated drug trafficking to a major political issue.

Against this backdrop, President Donald Trump’s emphasis on securing access to strategic crude supplies and cracking down on narcotics networks reflects a broader domestic and geopolitical agenda.

Energy security, border control, and regional influence remain high-priority themes in US politics. Venezuela, given its oil reserves and its role in regional trafficking routes, has become central to these debates, turning a once-pragmatic partnership into a deeply strained relationship.

Pakistan must add Gold Backed Funds

Pakistan’s financial regulators often speak of diversification, innovation, and deepening of markets — yet these ambitions rarely translate into actionable reforms. One opportunity stands out, both practical and low-risk, and yet remains untouched - the introduction of gold-backed funds. With the State Bank of Pakistan (SBP) holding nearly 50 tons of gold in its reserves, the country is well-positioned to convert a fraction of its dormant assets into market-enabling financial instruments.

Global central banks have already moved in this direction. In dozens of jurisdictions, gold is no longer treated as a static reserve item but as a strategic financial asset supporting exchange-traded funds (ETFs) and structured investment products. Pakistan, in contrast, keeps its bullion locked away — valuable, but economically inactive. This conservative mindset needs a calibrated rethink.

The proposal is simple and regulator-friendly. State Bank of Pakistan (SBP) should release 100 kilograms of gold through the Pakistan Mercantile Exchange (PMEX), specifically targeting the creation of gold-backed ETFs. The quantity is symbolic when compared to total reserves; it carries no threat to reserve adequacy. But its impact on market depth, investor confidence, and product diversity would be significant. SBP-verified bullion sold through PMEX would enhance transparency, improve price discovery, and finally allow Pakistan to list a credible gold-backed fund in its financial ecosystem.

Once the ETF market is seeded, SBP should gradually import around 150 kilograms of gold, timed with favorable global prices. This ensures reserves are not only restored but increased, allowing for future expansion of gold-based investment products. The goal is to create a sustainable, market-driven cycle — not a one-off intervention.

For regulators, the benefits are clear. Gold-backed funds broaden the investment menu in a market dominated by government securities. They attract new investor segments, document savings that would otherwise sit in unreported physical gold, and add liquidity to PMEX. More importantly, they align Pakistan with global best practices, where commodity-based financial products are now standard tools for stabilizing markets.

The concern that releasing central-bank gold might destabilize reserves is misplaced. A 100-kilogram sale out of a 50-ton stock is hardly a depletion; it is prudent activation of an underutilized asset. Paired with a planned replenishment strategy, the initiative strengthens rather than weakens Pakistan’s reserve position.

Pakistan’s financial system suffers from chronic concentration, limited innovation, and excessive reliance on debt instruments. Gold-backed funds offer a low-risk, high-credibility avenue for reform — one that regulators can implement without disrupting monetary policy or fiscal planning.

It is time to stop treating gold as an untouchable relic of reserve management. If Pakistan truly wants deeper, more diversified capital markets, then adding gold-backed funds is no longer optional — it is need of the time.

 

China backs expanding Iran-Saudi ties

Iran, China, and Saudi Arabia have wrapped up their third Trilateral Committee Meeting, with Beijing once again underscoring its commitment to strengthening relations between Tehran and Riyadh.

The meeting was held Tuesday at Iran’s Foreign Ministry in Tehran and was chaired by Iranian Deputy Foreign Minister Majid Takht-Ravanchi. Saudi Deputy Foreign Minister Walid al-Kharaji and China’s Deputy Foreign Minister Miao Deo also took part.

During the session, the three sides issued a joint statement outlining key commitments and recent progress.

They reaffirmed Iran and Saudi Arabia’s dedication to fully implementing the 2023 Beijing Agreement, the China-brokered deal that restored diplomatic ties between the two nations. Both countries stressed the importance of upholding sovereignty, territorial integrity, independence, and security in line with the UN Charter, the Charter of the Organization of Islamic Cooperation (OIC), and international law.

The statement also praised China’s “continued positive role” in facilitating dialogue and overseeing the agreement’s implementation.

For its part, China reiterated its willingness to support and encourage further cooperation between Tehran and Riyadh in political, economic, cultural, and security areas.

The joint statement highlighted progress in consular coordination, noting that this cooperation helped ensure the safe travel of more than 85,000 Iranian Hajj pilgrims and over 210,000 Umrah pilgrims in 2025.

It also welcomed the expanding exchanges between Iranian and Saudi research centers, universities, media outlets, and cultural institutions.

Addressing regional issues, the three countries called for an immediate end to Israeli military operations in Palestine, Lebanon, and Syria, and condemned violations of Iranian sovereignty.

Iran’s representative expressed appreciation for the steadfast support shown by Saudi Arabia and China during Israel’s June aggression against Iran.

The parties further reaffirmed their backing of a comprehensive, UN-led political solution in Yemen.

Iran and Saudi Arabia restored diplomatic ties in March 2023 after a seven-year break, following a China-mediated agreement that led to the reopening of embassies.

Earlier rounds of the trilateral committee were held in Beijing and Riyadh, where all sides restated their commitment to respecting sovereignty and non-interference, and acknowledged China’s ongoing mediation in support of regional dialogue.

 

Pakistan Plunging Deeper into Debt Trap

If 2025 has revealed anything, it is the alarming disconnect between Pakistan’s economic reality and the self-congratulatory narratives pushed by its policymakers.

The year has passed without a single meaningful breakthrough—no new productive units, no serious investment in balancing, modernization or replacement (BMR), and no expansion in industrial capacity. The economy is drifting, yet those responsible for steering it remain disturbingly complacent.

The import bill tells a story of its own. A 15 percent surge in imports exposes how deeply dependent the country has become on everything from basic raw materials to high-end consumer goods. Simultaneously, a 5 percent decline in exports reflects both declining competitiveness and an industrial sector gasping for breath. This is not a temporary imbalance; it is a structural failure in the making, now accelerating under an administration that mistakes cosmetic measures for policy.

Instead of responding with urgency, Pakistan’s economic managers have taken refuge in denial. They continue celebrating short-term dollar inflows as if these lifelines represent real progress. Their strategy—if it can be called one—rests entirely on IMF bailouts, emergency loans from friendly countries, and repeated rollovers of past obligations. This is not economic management; it is firefighting with borrowed water.

Worst of all, there is no sign of strategic thinking. No national plan for industrial revival, no push for technological upgrading, no attempt to diversify exports, and no investment in productivity. The economy is being held together by ad hoc decisions, political gimmicks, and a misplaced belief that stabilization alone can substitute for growth.

Pakistan is not suffering from a lack of options; it is suffering from a lack of seriousness. Nations facing crises reform their energy sectors, modernize their agriculture, incentivize manufacturing, and push for export-oriented growth. Pakistan, by contrast, has spent 2025 celebrating marginal improvements while ignoring the collapse taking place beneath the surface.

With rising imports, shrinking exports, stagnant industries and policymakers lost in complacency, the direction is painfully clear, Pakistan economy is plunging deeper into debt trap.

PSX benchmark index closes almost flat

Pakistan Stock Exchange (PSX) gained 408 points or 0.24%WoW to closing at 167,086 points on Friday, December 05, 2025. The appointment of Field Marshal Asim Munir as Chief of Defense Forces and the extension in maturity of Saudi Arabia’s US$3.0 billion deposit helped settle mid-week volatility.

Market participation dropped by 22%WoW due to volatility, with average daily traded volume declining to 863 million shares from 1.1 billion shares in the prior week.

On the external front, trade deficit widened by 33%YoY to US$2.9 billion in November 2025, driven by 5%YoY increase in imports and 15%YoY decline in exports.

Headline inflation remained in line with expectations at 6.1%YoY for November 2025.

Cement and E&P contributed the most to index’s gains, while cement sector rallied on the back of 2% YoY growth in local dispatches and LUCK’s foreign expansion announcement, while E&P sector advanced as LNG diversion plan progressed and the auction of offshore blocks attracting Turkish investment.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$14 million to US$14.6 billion as of November 28, 2025.

Other major news flow during the week included: 1) Petroleum product sales drop 10% YoY in November, 2) FBR faces PKR143 billion shortfall in achieving November 2025 target, 3) Refinery upliftment jumps 40%YoY in November, 4) Wheat sowing likely to beat target in Punjab, and 5) Business confidence rises to 22%, as per OICCI.

Inv. Banks/ Cos, Refinery, and Cement were amongst the top performing sectors while, Automobile parts & assembler, Textile spinning, and Fertilizer were among the laggards.

Major buying was recorded by Individuals and Mutual Funds with a net buy of US$17.8 million and US$12.0 million, respectively. On the other hand, Insurance and Foreigners were major sellers with net sell of US$32.4 million and US$9.7 million, respectively.

Top performing scrips of the week were: BNWM, PTC, SRVI, PIOC, and TRG, while laggards included: THALL, AICL, HUMNL, HGFA, and FHAM.

According to AKD Securities the momentum in the benchmark index of PSX is likely to continue given successful IMF Executive Board approval of the IMF’s second review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields.

Investors’ sentiment are expected to further improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States and Saudi Arabia. This outlook is also supported by the lack of alternative investment avenues and the attractive valuation of local equities.

Top picks of AKD Securities include: MEBL, MCB, HBL, OGDC, PPL, PSO, ENGROH, LUCK, DGKC, FCCL, ILP, and INDU.

Damages caused by Iranian attack to strategic installations forced Israel to ceasefire

The ceasefire Israel reluctantly embraced did not emerge from any humanitarian awakening. It was triggered by the sobering reality that Iranian ballistic missiles had successfully targeted some of Israel’s most sensitive strategic installations. A fresh State Comptroller report details how institutional negligence allowed these vulnerabilities to fester until they exploded into national exposure.

During the June conflict, Iran managed to breach Israel’s sophisticated air-defense systems and strike core facilities: Beersheba’s medical center, the Bazan oil refinery in Haifa, and crucial laboratories at the Weizmann Institute. These were not incidental targets—they were pillars of Israel’s medical, energy, and scientific infrastructure. Their exposure underscored a deeper structural failure.

Comptroller Matanyahu Englman’s report shows that warnings about these vulnerabilities date back to 2011. A detailed assessment issued in 2020 was also ignored. Despite years of alerts, the Defense Ministry, IDF, National Security Council, and Finance Ministry never created a coherent legal or operational framework to physically protect these sites. Instead, bureaucratic turf wars and funding disputes ensured that little to nothing was done.

Englman stressed a fundamental distinction: Israel’s air-defense umbrella—Iron Dome, David’s Sling, Arrow—may intercept threats, but no system is airtight. Once a missile breaks through, physical defenses must protect critical installations. Yet these were virtually nonexistent. Hamas, Hezbollah, the Houthis, and Iran all managed to exploit this weakness during the war.

Even after large-scale attacks began, the Defense Ministry continued to delay decisions. Committees met without purpose, deadlines were missed, and responsibility was shuffled between agencies. It was only in late 2024—when senior officials were preparing to depart—that any meaningful action started.

Once Iranian missiles struck strategic sites, Israeli leaders recognized that further escalation risked even more damaging hits. The country could not afford to expose additional “underdeclared” facilities, nor could its leadership sustain the political and economic fallout of deeper infrastructure disruption.

Israel did not choose ceasefire out of compassion for Gaza. It chose it because Iranian pressure exposed vulnerabilities its leadership could no longer hide.

When Arms Thrive - Humanity Pays Price

As missiles streak across skies from Gaza to Ukraine, another explosion is happening far from the battlefield — an explosion of profits. The global arms industry has just booked its highest revenue ever recorded, turning geopolitical turmoil into an unprecedented financial windfall.

According to the latest Stockholm International Peace Research Institute (SIPRI) report, the world’s top 100 arms manufacturers earned a staggering US$679 billion in 2024 — the highest figure in more than 35 years of monitoring. The trend is unmistakable - the more insecure the world becomes, the richer the military-industrial complex grows.

SIPRI notes that rising geopolitical tensions, nuclear weapons modernization, and sustained conflicts drove the bulk of the increase. A remarkable 77 of the Top 100 companies boosted their revenues, and 42 recorded double-digit growth.

For the first time since 2018, all five of the largest defence companies — Lockheed Martin, RTX, Northrop Grumman, BAE Systems and General Dynamics — expanded their earnings simultaneously, raking in a combined US$215 billion. Four of these giants are American; the fifth is British.

Europe and North America led the surge, but increases were registered across almost all regions — except Asia and Oceania, where Chinese industry struggles dragged totals down.

One of the most troubling profit spikes came from the Gaza war. Israel’s leading arms producers — Elbit Systems, Israel Aerospace Industries, and Rafael Advanced Defense Systems — collectively increased revenues by 16% to US$16.2 billion, as the assault on the enclave killed tens of thousands of Palestinians and flattened civilian infrastructure. The numbers expose a stark reality - war zones are becoming revenue streams.

In the United States — responsible for nearly half of all global arms revenue — a new entrant emerged. SpaceX, owned by billionaire Elon Musk, entered the Top 100 for the first time, more than doubling its arms revenue to US$1.8 billion. Musk’s deep alignment with US political power, including major donations to Donald Trump and Republican candidates, underscores how closely defence profits now intertwine with political influence.

The SIPRI figures raise a sobering question, when conflict becomes profitable, who is truly invested in peace?