Pakistan, Iran seek diplomacy as US-Iran strikes kill 14

Pakistan Prime Minister Shehbaz Sharif and Iranian President Masoud Pezeshkian discussed the regional situation in a phone call Thursday, agreeing to advance bilateral cooperation as US airstrikes on Iran killed at least 14 people and threatened a fragile ceasefire.

"The outreach suggests efforts may be underway to reduce tensions," Iranian Foreign Minister Abbas Araghchi said on Telegram after speaking with his Saudi, Turkish and Omani counterparts and Pakistan's army chief, Field Marshal Asim Munir, who has been one of the main mediators in the war.

The call came as the US military's Central Command said it hit 90 targets across Iran, releasing footage of strikes on an airport runway and missile launchers. Iranian state media reported explosions in several locations, including Bushehr, home to Iran's nuclear power plant complex, and accused the US of striking near the plant. Iran's paramilitary Revolutionary Guard fired missiles at a US base in Jordan, and air defense sirens sounded in Bahrain, Kuwait, Qatar and Jordan.

The Strait of Hormuz, through which a fifth of the world's traded oil and natural gas passed before the war began with US and Israeli attacks on Feb. 28, saw traffic plunge to 233 ships in May from more than 3,100 in June 2025, according to Lloyd's List Intelligence. June traffic recovered to 576 ships after a tentative deal reopened the waterway, but President Donald Trump said Wednesday the interim ceasefire was "over" after Iranian attacks on three tankers, threatening to escalate further if shipping disruptions continued.

Negotiations to reach a final deal were due to start after the funeral for Supreme Leader Ayatollah Ali Khamenei, who was killed in the opening salvos of the war. Khamenei was laid to rest Thursday in his hometown of Mashhad, where tens of thousands of mourners thronged the streets. Parliament Speaker Mohammad Bagher Qalibaf, a key negotiator in the talks, warned on X that "if you strike, you'll get hit."

The Pakistan-Iran connection carries particular weight given Islamabad's role as a mediator. Pakistan's army chief Munir has been one of the main interlocutors between Tehran and Washington, and the country shares a restive border with Iran in Balochistan, where both face separatist insurgencies. Pakistan this week launched a crackdown after Balochistan attacks, claiming to have killed 75 militants from the Baloch Liberation Army.

Strait of Hormuz at the center of the crisis

The waterway remains the key economic flashpoint. Before the war, the strait handled about a fifth of the world's traded oil and natural gas. Traffic data from Lloyd's List Intelligence shows the disruption's scale: 576 ships transited in June, compared with 233 in May and more than 3,100 in June 2025. Trump renewed threats to hit Iran's civilian infrastructure, including electric and desalination plants, and to seize Kharg Island, through which about 90 percent of Iranian oil exports pass.

The last time the strait faced a comparable disruption was during the 2019 tanker attacks, when insurance premiums for vessels transiting the waterway surged tenfold and Brent crude spiked about 15 percent over two weeks. This time, the scale of military engagement is far larger, with US strikes hitting 90 targets across Iran and Iran retaliating against multiple US-allied states.

For markets, the key risk is whether the Pakistan-mediated channel can stabilize the situation before the Strait of Hormuz is fully disrupted again. A return to the May traffic levels of 233 ships would remove about 2.9 million barrels per day of crude from global markets, based on pre-war flow rates, potentially pushing Brent above $100 a barrel. The next few days, as diplomatic channels intensify following Khamenei's funeral, will determine whether the ceasefire can be salvaged or the region tips back into full-scale war.

This article is for informational purposes only and does not constitute investment advice.