War of the World?

Pakistan and Qatar’s effective diplomacy has finally helped secure a temporary peace deal between Iran and the United States. Although the agreement cannot yet be considered final, both sides have agreed to an interim framework and a 60-day negotiation process. However, the longstanding strain in relations between the two countries still persists.The deal has brought a sense of relief to people around the world. Nevertheless, differences remain between the two sides on several issues, particularly regarding nuclear monitoring, inspections, and verification procedures, as reflected in their recent statements. Past diplomatic developments indicate that various countries, particularly Pakistan, are still engaged in behind-the-scenes mediation efforts to prevent the conflict from escalating further. Iran conveyed its response to American ceasefire proposals to the United States through Pakistani mediators, while Washington rejected Tehran’s reply, calling it insufficient. Iran is unwilling to bow under any circumstances, while threats from U.S. President Donald Trump continue unabated. This crisis has increased tensions around the Strait of Hormuz, one of the world’s most important maritime routes for oil transportation. Maritime security, economic sanctions, military movements, and concerns regarding Iran’s nuclear program have become central topics of global diplomacy. The global oil market is facing uncertainty, and fears of energy supply disruptions have alarmed governments and investors worldwide.

The roots of tensions between the United States and Iran trace back to the 1979 Iranian Revolution. However, the current crisis is driven by factors including Iran’s nuclear program and uranium enrichment, Western concerns regarding Tehran’s nuclear ambitions, US economic sanctions on Iran, Iran’s influence across the Middle East, the American military presence in the Gulf region, concerns regarding Israel’s security, and the broader struggle for regional dominance. Disputes related to maritime routes in the Strait of Hormuz, recent military operations, and retaliatory strikes have further deepened mistrust between Washington and Tehran. The United States accuses Iran of creating instability in the region, while Iran considers American sanctions and military pressure to be a form of economic warfare.

Pakistan has emerged as an important diplomatic actor in this crisis, and its efforts to reduce regional tensions continue. Due to its balanced relations with Iran, Saudi Arabia, China, Gulf countries, and the United States, Islamabad has positioned itself as a bridge between various powers. Pakistan hosted negotiations in Islamabad, while Prime Minister Shehbaz Sharif and Field Marshal Syed Asim Munir played a significant role in facilitating contacts between Tehran and Washington. According to reports, after a deadlock in the first round of negotiations, Iran delivered its diplomatic message to the United States through Pakistani mediators, further enhancing Pakistan’s diplomatic importance. Global observers and regional governments have praised Pakistan’s efforts to prevent war and maintain peace in the region. Pakistan’s diplomacy is being appreciated around the world, as Islamabad once again assumed responsibility for coordinating among different powers during the recent crisis.

The conflict has exposed the global economy to severe uncertainty. The biggest threat is to the energy sector. If the Strait of Hormuz remains closed or tensions escalate further, global oil trade could face additional disruptions, resulting in extraordinary increases in oil prices. Shipping and insurance costs would also rise, stock markets would face uncertainty, and supply chain disruptions would reduce investor confidence. Developing countries could suffer the most from the expected rise in inflation, as they heavily depend on imported fuel and external financial assistance. The Gulf countries, being at the centre of the crisis, face the greatest risks. The economies of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, and Bahrain depend on stable oil exports and secure maritime routes. If the war intensifies, more oil facilities could become targets, severely affecting foreign investment, tourism, and the aviation sector, and destabilising financial markets. Although rising oil prices may temporarily increase Gulf states’ revenues, prolonged instability could damage their long-term economic plans.