Pakistan has stepped into a delicate diplomatic role as tensions between Washington and Tehran enter a potentially dangerous new phase, with Army Chief Asim Munir visiting Iran on Monday for talks aimed at promoting regional peace and stability. His visit comes just as the United States prepares to announce what Treasury Secretary Scott Bessent has described as the “greatest financial offensive ever” against Iran and countries that continue to support its economy.
The timing places Pakistan at the centre of a rapidly widening confrontation. Islamabad has maintained relations with both Washington and Tehran, giving it an unusual opportunity to communicate across a divide that has become increasingly difficult to bridge. But the risks are equally significant: any failure of diplomacy could intensify sanctions, disrupt energy flows through the Gulf and further destabilise a region already suffering from the consequences of months of conflict.
Pakistan enters a high stakes mediation effort
Munir’s arrival in Tehran comes after Pakistan positioned itself as a potential mediator between the United States and Iran. Pakistani officials said the visit was intended to promote regional peace and stability, while a Pakistani source said Munir was expected to meet individuals close to Iran’s supreme leader.
The army chief also has a personal relationship with U.S. President Donald Trump, adding another dimension to Islamabad’s diplomatic position.
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Pakistan’s ability to maintain communication with both sides could prove valuable at a time when direct U.S.-Iran diplomacy has largely stalled. The two countries have not conducted direct military strikes against each other’s forces for weeks, but their broader confrontation remains unresolved.
Tehran is simultaneously preparing for another diplomatic channel, with Oman’s foreign minister expected to visit Iran to discuss the Strait of Hormuz.
The combination of Pakistani and Omani mediation suggests that regional actors are attempting to create diplomatic space before the confrontation develops into another major military escalation.
Washington’s economic offensive raises the stakes
The immediate trigger for the latest escalation is Washington’s planned economic campaign.
Bessent has warned that the United States will target countries that continue to engage with Iran’s economy and financial system. His language indicates that the measures are intended not only to punish Tehran directly but also to pressure third countries into reducing their economic relationships with Iran.
That approach could substantially widen the conflict.
Iran has lived under extensive U.S. sanctions since the 1979 Islamic Revolution, but its economy has continued to operate through alternative trading networks and relationships with countries willing to maintain commercial ties.
A more aggressive sanctions campaign could therefore force countries such as China and others to make difficult choices between maintaining access to Iranian energy and avoiding confrontation with Washington.
For Iran, the economic pressure comes at an especially vulnerable moment.
The country entered the conflict with high inflation, a weakened currency, energy shortages and long-standing structural problems. Months of fighting have added damaged infrastructure, disrupted trade, lost production and potentially enormous reconstruction costs.
The economic consequences could deepen social and political pressure inside Iran.
Tehran threatens the world’s energy system
Iran’s response has focused on one of its most powerful remaining forms of leverage: energy.
Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, warned that if the economic war continues, Iran could halt all oil exports from the Gulf and treat countries participating in or supporting the U.S. economic campaign as hostile.
That threat is significant because the Strait of Hormuz remains one of the world’s most important energy chokepoints.
Iran has already warned shipping vessels not to pass through the strait without permission. Continued attacks and threats have pushed commercial shipping through the waterway close to a standstill, increasing pressure on global energy markets.
The potential consequences extend far beyond Iran.
A prolonged disruption could raise crude and fuel prices, increase transportation costs and add to inflationary pressure in economies already dealing with higher energy and defence expenditures.
The strategic dilemma for Washington is therefore clear. Economic pressure may weaken Tehran, but excessive pressure could encourage Iran to weaponise its remaining leverage over energy supplies.
The tanker attack widens the danger zone
The threat is no longer confined to the Strait of Hormuz.
A projectile struck a tanker west of Saudi Arabia’s Red Sea port of Yanbu on Monday, causing a fire on the vessel. Maritime monitors did not identify the attacker.
The incident is particularly significant because Iran’s Houthi allies have already threatened Saudi oil exports that are being diverted through the Red Sea to avoid Hormuz.
This creates the possibility of a broader disruption involving multiple maritime routes.
If Hormuz becomes inaccessible while alternative routes are also threatened, Gulf producers could face increasingly severe difficulties moving oil to international markets.
That would transform the confrontation from a bilateral U.S.-Iran economic conflict into a global energy security crisis.
China’s position could determine the effectiveness of sanctions
China represents perhaps the biggest test of Washington’s economic strategy.
Bessent has previously urged Beijing to cooperate with the United States, pointing to China’s substantial dependence on Gulf oil.
But Beijing rejected the underlying logic of the pressure campaign, saying sanctions and coercive measures do not help resolve disputes and that China would take whatever measures were necessary to protect its interests.
This matters because sanctions are most effective when major trading partners cooperate.
If China continues purchasing Iranian energy and maintaining economic links with Tehran, Iran may retain an important source of revenue despite intensified U.S. restrictions.
At the same time, Beijing has to balance its relationship with Tehran against its broader economic relationship with Washington.
The result could be another arena of strategic competition between the world’s two largest economies.
Iran’s military capacity remains dangerous
The economic offensive also comes against the backdrop of a severely weakened but still dangerous Iranian military capability.
U.S. and Israeli strikes have damaged much of Iran’s conventional military infrastructure and killed its former Supreme Leader Ayatollah Ali Khamenei. Yet Tehran retains enough missile and drone capability to threaten Gulf states and commercial shipping.
That creates an asymmetric strategic balance.
Iran may be unable to compete conventionally with the United States, but it can still impose considerable costs by threatening shipping, energy infrastructure and regional partners.
This is precisely why the Strait of Hormuz has become so important.
Iran does not necessarily need to permanently close the waterway to create disruption. The perception that vessels are unsafe can itself be enough to raise insurance premiums, increase freight costs and discourage shipowners from entering the region.
Pakistan faces a difficult balancing act
For Islamabad, the mediation effort presents both an opportunity and a risk.
Pakistan has strong geographic and security interests in preventing another prolonged regional conflict. Instability in the Gulf can affect energy prices, remittances, trade and Pakistan’s broader economic environment.
At the same time, Islamabad cannot afford to alienate Washington.
Pakistan’s relationship with the United States has gained renewed importance under Trump, particularly given Munir’s direct relationship with the president. That gives Pakistan diplomatic access but also increases the sensitivity of its engagement with Tehran.
Islamabad therefore has to convince Washington that engagement with Iran is intended to prevent escalation rather than undermine U.S. sanctions.
For Tehran, meanwhile, Pakistan’s involvement could provide a useful regional channel to communicate with Washington without appearing to concede directly to American pressure.
Diplomacy has a narrow window
The immediate challenge is preventing the economic confrontation from becoming a wider military crisis.
Iran’s threats against oil exports and shipping demonstrate that Tehran sees energy disruption as a central instrument of deterrence. Washington, meanwhile, appears determined to increase economic pressure until Iran changes its behaviour.
Neither side currently appears willing to make the kind of concession necessary for a comprehensive settlement.
That makes regional mediation increasingly important.
Pakistan and Oman cannot resolve the fundamental U.S.-Iran dispute on their own, but they can potentially facilitate communication, clarify red lines and create opportunities for negotiations that would otherwise remain unavailable.
The alternative is increasingly dangerous.
A prolonged economic confrontation could push Iran toward further attacks on shipping, encourage greater involvement by regional allies and raise global energy prices. At the same time, harsher sanctions could deepen Iran’s domestic economic crisis and create additional incentives for Tehran to retaliate.
Pakistan’s diplomatic initiative therefore arrives at a critical moment. Its success will depend not on persuading either Washington or Tehran to abandon their core objectives overnight, but on preventing economic pressure from crossing the threshold into another cycle of military escalation.
The central question is no longer simply whether the United States can economically isolate Iran. It is whether Washington can do so without triggering an energy shock that harms its allies and the global economy, and whether Tehran can withstand the pressure without turning the Gulf into a wider battleground.
For Pakistan, the immediate priority is keeping those two calculations from colliding.
With information from Reuters.
