Pakistan is actively engaged in diplomatic efforts to de-escalate tensions between the United States and Iran, as reported by Pakistan's ambassador to the UN, Asim Iftikhar Ahmad. Despite renewed strikes and a lack of full implementation of the Islamabad Memorandum of Understanding (MoU), Pakistan is pressing both countries to return to negotiations. This mediation involves high-level communications with Washington and Tehran, with Pakistan advocating for the framework provided by the MoU as the best path to a comprehensive resolution. These diplomatic activities are occurring while Pakistan serves its final year on the UN Security Council, leveraging its position to promote peace.
The ongoing conflict has significant economic repercussions. Disruptions around the Strait of Hormuz, a crucial economic pressure point, have led to severe pressure on global energy markets. Iraq, for instance, has reportedly lost about $60 billion in revenue due to Iran preventing its tankers from passing through Hormuz. Shipping traffic through the strait remains substantially below pre-war levels, with only 12 commodity vessels transiting over a recent weekend, down from 35 the previous weekend, and significantly lower than the pre-war average of 125 large commercial vessels daily. US Central Command has redirected 109 commercial vessels since reinstating its blockade of Iranian ports in July, with Iran International reporting 110 redirected vessels.
International diplomatic efforts extend beyond Pakistan. French President Emmanuel Macron and US President Donald Trump have agreed to work on protecting Middle East energy infrastructure and ensuring freedom of navigation through Hormuz, while also seeking a moratorium on strikes against energy infrastructure. The Trump administration has also proposed a $5 billion contribution to a fund for regional energy infrastructure, seeking matching contributions from eight Middle Eastern partners for a potential $10 billion fund. Qatar is also intensely involved in mediation, with its foreign ministry confirming continuous efforts to bring the US and Iran back to the negotiating table. Treasury Secretary Scott Bessent announced that Iranian airlines would face effective international shutdown from September 23 due to sanctions against companies providing fuel, landing services, or ticket sales.
Iran's economy has been significantly impacted, with a reported 10.1% year-on-year contraction in its GDP for the quarter running late March to late June. The disruption also affects global energy markets, with Europe facing a projected fourth-quarter jet fuel deficit of 510,000 barrels per day, with nearly half of its jet fuel imports cut by the war. Yemen's Houthi movement has claimed 28 attacks. Despite these challenges, US envoy to the UN, Mike Waltz, reiterated President Trump's determination to prevent Iran from acquiring nuclear weapons and maintaining "maximum pressure," while keeping the door open for good-faith talks.
