For more than a decade, Pakistan has treated financial lifelines from the Gulf as a structural feature of its economy rather than a temporary bridge. Abu Dhabi’s refusal to roll over roughly $3.5 billion in deposits at the State Bank of Pakistan—now being repaid in tranches that include a $2 billion maturity on April 17 —should shatter that illusion once and for all. The timing is brutal. Global oil prices have spiked past $100 a barrel amid the Iran war. Pakistan’s foreign-exchange reserves hover near $16.4 billion, barely three months of import cover. Fuel costs are surging, inflation is accelerating, and the country is scrambling to meet the International Monetary Fund’s reserve targets under its $7 billion program. But the deeper damage is strategic. What is collapsing is not merely a banking arrangement but the assumption that money can indefinitely substitute for aligned interests.
Op-Ed
A Return to the Table in Islamabad
Pakistan’s capital has become an improbable pivot point in a war that was never supposed to last this long. Less than a week after the first face-to-face negotiations between the United States and Iran in more than 40 years collapsed in Islamabad, President Trump is signalling that a second round could begin “over the next two days.” He has even urged a New York Post reporter to stay put in Pakistan because “something could be happening.” Vice President JD Vance, who led the American side in last weekend’s 21-hour marathon, has described the Iranian negotiators as eager for a deal despite the deep mistrust. Pakistani officials, from Prime Minister Shehbaz Sharif to the powerful army chief Field Marshal Asim Munir, are racing to make it happen—Sharif leaves Wednesday for Saudi Arabia, Qatar and Turkey to line up regional backing before the fragile two-week ceasefire expires next week.
Trump’s Hormuz Blockade Is a Dangerous Gamble
The collapse of talks in Islamabad on Sunday was not a surprise. What followed was. Within hours of Vice President JD Vance boarding his plane home from Pakistan — after the highest-level direct negotiations between the United States and Iran since the 1979 revolution — President Donald Trump announced that the United States Navy would begin blockading Iranian ports and enforcing restrictions on the Strait of Hormuz. The fragile two-week ceasefire that had paused a war begun by American and Israeli strikes in late February now hangs by a thread. Oil prices leapt more than 8 percent on Monday, with both Brent and West Texas Intermediate crossing the $100-a-barrel threshold. Tankers turned back. Markets priced in the possibility of a deeper energy shock than anything the world has seen since the 1970s. This is not the way great-power crises are supposed to end. It is the way they spiral.
Why the US-Iran Talks Collapsed — and Why They Must Resume
The marathon negotiations in Islamabad ended much as they began: with both sides talking past each other across a chasm of mistrust that four decades of estrangement had only widened. After 21 hours of direct, face-to-face talks — the highest-level contact between American and Iranian officials since the 1979 Islamic Revolution — Vice President JD Vance stepped to the microphone in Pakistan’s capital and delivered a verdict that was polite in tone but blunt in substance. Iran had rejected Washington’s “final and best offer.” Tehran, for its part, accused the United States of making “excessive demands” and “unreasonable” requests on everything from the Strait of Hormuz to its nuclear program. No agreement was reached. No date was set for the next round. The two-week ceasefire that Pakistan had brokered on April 8 now hangs by a thread.
The Fragile Path to Peace in Islamabad
On Saturday morning, in the tree-lined diplomatic quarter of a capital better known for coups and crises than for brokering great-power peace, Vice President JD Vance will sit down with senior Iranian officials for the first direct negotiations between Washington and Tehran since the war began on Feb. 28. The meeting, hosted by Pakistan and involving Jared Kushner and Steve Witkoff on the American side, carries the weight of a region already scarred by nearly six weeks of fighting, at least 3,800 dead and an economic shock that has sent oil prices soaring and left hundreds of ships idling in the Persian Gulf.
Pakistan Brokers a Breather — Now Comes the Hard Part
The announcement came just before dawn in Islamabad on Wednesday: a two-week ceasefire between the United States and Iran, brokered at the last possible minute by Pakistani officials who understood what Washington’s bluster had obscured. President Trump had warned that “a whole civilization will die tonight” if Iran refused to reopen the Strait of Hormuz by his deadline. Instead, the pause arrived not through American firepower but through quiet Pakistani channels — a small circle of diplomats and military leaders who shuttled messages between adversaries who no longer trusted each other to speak directly. Iran agreed to coordinate safe passage through the strait, the artery carrying one-fifth of the world’s oil. The United States suspended its strikes. And both sides, predictably, declared victory.
Fuel Shock Isn’t the Crisis. Dependence Is
In Karachi, Mohammad Kashif stood at a petrol station and filling his tank at the new price of 458 rupees a liter did not need an economist to explain what was happening to his life. He simply knew that the money he once stretched across rent, food and school fees had suddenly vanished into the petrol pump. Across Pakistan, millions are making the same grim arithmetic.
Trump’s Recycled Rhetoric and the Real Cost of More War
President Trump’s primetime address on the war with Iran was never going to be easy listening. But even by the standards of a conflict that has already claimed thousands of lives, drained billions of dollars and sent global energy prices soaring, Wednesday night’s 19-minute performance was astonishingly empty. Billed as a moment for Americans to hear how the fighting would end, it delivered only the same threats, the same boasts and the same timeline — two or three more weeks of ferocious bombing — that everyone has heard for weeks. There was no new diplomatic formula. No acknowledgement of Iranian demands. No realistic path to reopening the Strait of Hormuz. Just the familiar vow to “hit them extremely hard” and “bring them back to the Stone Ages, where they belong.” This was not resolve. It was stalling.
The Perils of a War Half-Won
One month after the United States and Israel began their joint assault on Iran, the question that matters most is not whether American power has inflicted damage. It has. The question is whether that damage has brought the United States any closer to the decisive outcome President Donald Trump once described as both necessary and inevitable.
A $1.2bn IMF deal that cannot hide Pakistan’s deeper failings
When the International Monetary Fund signalled its staff-level agreement with Pakistan on 27 March, the timing was no coincidence. It came on the same day that Prime Minister Shehbaz Sharif overruled the Oil and Gas Regulatory Authority and blocked a rise in domestic fuel prices despite soaring international costs. Four weeks into a conflict that has upended energy markets across the Gulf, the Fund’s move looks less like business as usual and more like reluctant recognition that geopolitics has rewritten the script.