Pakistan urges US-Iran MoU implementation as Strait traffic drops 54%

Pakistan Prime Minister Shehbaz Sharif called on Iran and the US to implement their Islamabad-brokered peace accord as vessel transits through the Strait of Hormuz fell 54% in three days, threatening the fragile three-week-old ceasefire.

"All parties must exercise restraint and refrain from any action that could jeopardize the hard-earned peace gains," Sharif told Iranian President Masoud Pezeshkian in a phone call Friday, according to a statement from the premier's office.

Only 22 vessels crossed the strategic waterway on July 9, down from 30 a day earlier and 48 on July 7, according to maritime data firm Kpler. The decline followed a second consecutive day of US airstrikes targeting more than 90 locations across Iran, including near the Bushehr nuclear facility. Global oil supply rose 4.1 million barrels a day in June after the strait reopened but remained 9.4 million barrels a day below pre-war levels, the International Energy Agency said.

The renewed hostilities threaten to unravel the Islamabad Memorandum of Understanding, a framework peace deal signed last month with Pakistani mediation. The IEA warned that any further escalation could derail its forecast of a significant oil market surplus next year, while marine insurers have shortened war risk premium windows to just six hours before voyage, down from the usual 24 to 48 hours.

Diplomatic Push Intensifies

Sharif also spoke by phone with Qatar's Emir Sheikh Tamim bin Hamad Al Thani, thanking him for Doha's role in the peace efforts that led to the Islamabad MoU and the first round of high-level technical talks at Burgenstock. Qatari negotiators have traveled to Iran in coordination with the US to meet Iranian officials and create conditions for negotiations to resume, according to a diplomat familiar with the visit.

The diplomatic outreach comes as President Donald Trump said Iran has asked to continue talks and that the US has agreed to engage, but stressed that "the ceasefire is over." Iran's Supreme National Security Council warned that Israel "will not be spared" if it targets the country's infrastructure, while Iranian media reported multiple explosions across southern Iran, including Bushehr, Konarak and Bandar Abbas.

Market Fallout Spreads

The escalation has pushed the European Central Bank "back to square one" in fighting high inflation after energy prices jumped again, ECB policymaker Yannis Stournaras said Friday. The ECB raised rates at its June 10-11 meeting, and investors now expect two more hikes over the next year, up from expectations of a pause before the renewed hostilities.

The last time the Strait of Hormuz faced a sustained closure — during the initial phase of the US-Iran conflict — as much as 14 million barrels a day of crude flows were cut, representing the largest supply crisis on record. While the strait has since reopened, the current decline in transits suggests shipping companies are reassessing risk. At least five ballast LNG carriers have entered the waterway in recent days, though overall traffic remains well below normal, according to ship-tracking data from Kpler and LSEG.

Brokers representing Trump purchased between $9.7 million and $24.3 million in stocks from arms manufacturers including Palantir, Lockheed Martin, General Dynamics and RTX in 2025 before the war began, according to an analysis by Responsible Statecraft. Almost all the stocks rose sharply through 2025, the analysis showed.

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