For months, the tensions and conflict between the United States and Iran kept global peace under serious strain. However, in June 2026, the world witnessed an important diplomatic breakthrough when an interim peace agreement was reached between the United States and Iran. A significant aspect of this agreement is Pakistan’s active role as a mediator and facilitator.
The agreement has been named the “Islamabad Memorandum of Understanding,” and Pakistan played an important role as both mediator and guarantor. This development is significant not only for the region but also for the entire world, as tensions between Iran and the United States over the past several months have severely affected the global economy, energy markets, and maritime trade.
The closure of the Strait of Hormuz had pushed global oil prices to unprecedented levels, and people around the world, including those in Pakistan, suffered the consequences in the form of rising inflation. Pakistan had been serving as a communication channel between the United States and Iran for several months. It not only facilitated the exchange of messages between the two countries but also prepared various proposals and draft frameworks that helped advance the negotiations. According to American and international sources, Qatar, Egypt, and Turkey also assisted in the process; however, Pakistan maintained the central mediating role.
Serving as a bridge between two adversaries, such as the United States and Iran, is considered evidence of Pakistan’s diplomatic capabilities.
The Pakistani leadership reportedly presented a 14-point reconciliation framework that helped keep both sides engaged in dialogue. Ultimately, the interim agreement was finalised on June 17, and its details were forwarded to the U.S. Congress on June 18. If credit for this peace agreement is to be given to any individual, it can be attributed to Field Marshal Syed Asim Munir. He made important visits to Tehran and held direct meetings with the Iranian leadership. The purpose of these meetings was to build trust and advance the negotiation process. During discussions with Chinese officials, General Asim Munir had also expressed optimism that an agreement between the United States and Iran was close. Subsequent developments appeared to indicate that Pakistan’s military and political leadership had been actively engaged in behind-the-scenes diplomacy.
This is being viewed as a major diplomatic success for Pakistan because, in the past as well, Pakistan has played conciliatory roles in relations between Saudi Arabia and Iran, Afghanistan, and other regional disputes. Serving as a bridge between two adversaries, such as the United States and Iran, is considered evidence of Pakistan’s diplomatic capabilities. According to this perspective, the efforts of Field Marshal Syed Asim Munir played a key role in making this achievement possible. Immediately after the agreement, global markets responded positively.
With the reopening of the Strait of Hormuz and a reduction in the risk of conflict, crude oil prices witnessed a significant decline. According to a MarketWatch report, Brent crude prices fell to around $87 per barrel and later dropped below $78 per barrel in some markets. Reuters also reported that following the ceasefire and reduced tensions, oil prices fell to their lowest level in seven weeks, with Brent crude declining to approximately $91.45 per barrel and WTI crude to around $88.20 per barrel.
Economic experts believe that if commercial activity in the Strait of Hormuz remains fully restored, oil prices may stabilise further in the coming weeks. As tensions between Iran and the United States escalated, global crude oil prices rose significantly. Since Pakistan meets a large portion of its energy needs through imported oil, increases in international prices have a direct impact on the domestic market. The government raised the prices of petroleum products at various times to offset higher import costs.
Although the government reduced petrol and diesel prices by approximately 22 rupees per litre in May 2026, the public continues to bear the burden of high fuel costs and inflation. It is now essential to provide relief to the people. While the government has announced reductions in fuel prices, many citizens still find these prices difficult to afford. If the burden of higher global oil prices was passed on to the public during the period of conflict, then the benefits of lower international prices should also be transferred to the people.
This is a matter of economic justice. One of the major causes of inflation in Pakistan is the high cost of fuel. When petrol becomes more expensive, transportation, agriculture, industry, and almost every aspect of daily life become more costly. Likewise, when oil prices decline, the benefits should reach the entire economy. For several years, the people of Pakistan have been facing inflation, heavy electricity bills, and high fuel prices. Further reductions in petroleum prices, relief in electricity tariffs, and a decrease in inflationary pressures would not only meet public expectations but could also inject new life into the economy. This is the time to make economic relief a national priority alongside diplomatic success, so that ordinary citizens of Pakistan can genuinely experience the benefits of these positive developments.
The writer is an old Aitchisonian who believes in freedom of expression, a freelance columnist, entrepreneur and social activist.