Iran war is far from over. Credible reports indicate continued U.S. and Israeli military positioning in Kuwait, the UAE, and adjoining Gulf states following the April armistice between Iran and the United States. Such deployments suggest that the current pause may be operational rather than conclusive.
This pause may, in part, be influenced by the upcoming meeting between Donald Trump and Xi Jinping on 14–15 May, particularly given the broader geopolitical stakes involving trade, regional stability, and great-power competition. At the same time, battlefield dynamics, alliance coordination, and economic pressures are also likely contributing factors.
My consultations with former senior officers of the Pakistan military suggest that operational timing remains a critical factor in any potential U.S. offensive planning. This assessment is consistent with historical patterns: extreme summer temperatures in the Gulf—often exceeding 45°C—have previously affected the tempo of U.S. military operations in Iraq and Afghanistan. While modern forces are capable of operating in such environments, large-scale ground offensives tend to be calibrated around logistical sustainability, making late summer or early autumn potentially more favourable windows for escalation.
The fact of the matter is that President Donald Trump, despite political and operational risks, may be compelled to consider such action under external pressure, as suggested by segments of U.S. security analysis. One indicator of shifting regional dynamics is the UAE’s withdrawal from OPEC. If this move triggers a broader shift—where major producers, including Saudi Arabia, abandon coordinated output limits—the oil market would move from cartel management towards a more competitive structure.
In such a scenario, increased production and competition for market share would place sustained downward pressure on prices over the medium term, even as near-term volatility persists—especially with the Strait of Hormuz likely to remain contested over the next three to four months. Under moderate conditions, prices could settle in the $60–70 range; however, in a more aggressive supply expansion—akin to the 2020 Russia–Saudi Arabia oil price war—they could fall to $40–50 or lower, well below Saudi fiscal breakeven levels of $90–100.
This would place Saudi Arabia under considerable pressure, potentially forcing a strategic response and, by extension, increasing pressure on Pakistan owing to existing defence ties. While such declines would benefit major importers like India and China, they would strain oil-dependent economies and heighten market instability.
If timely measures are not adopted to anticipate and mitigate these risks, the country’s economic stability and, by extension, its national security architecture could come under significant threat
Over time, a more fragmented pricing system could also encourage diversification away from dollar-denominated trade, gradually weakening the petrodollar system and elements of U.S. financial leverage—thereby increasing pressure on Washington both domestically and internationally.
The prospect of cheaper energy for India and China, combined with increasing pressure on global markets, reflects a classic dynamic of oversupply and weakening demand—conditions that contributed to the Great Depression in 1929. The Rothschild family did play a role in financing governments during World War I, mainly by helping raise and distribute sovereign bonds, particularly in Britain and France.
However, they were only one part of a much broader financial system that included central banks such as the Bank of England, mass public war bond programmes, and major institutions like J.P. Morgan & Co., which played a leading role in financing the Allies. The war’s financial consequences carried directly into the Treaty of Versailles, which imposed heavy reparations on Germany and reshaped global financial flows and sovereign debt structures in the post-war period.
The financial structure created after World War I and formalised by the Treaty of Versailles helped set the stage for the Great Depression by creating an unstable, debt-driven global system. Germany was required to pay large reparations to Britain and France but lacked the resources to do so; to manage this, the system relied on U.S. loans—often arranged through banks like J.P. Morgan & Co.—which flowed into Germany, then back to the Allies as reparations, and ultimately to the United States as war debt repayments.
This circular flow worked only as long as American credit continued to expand. When the U.S. economy contracted following the 1929 stock market crash, loans dried up, the system collapsed, and Germany defaulted, triggering banking crises across Europe. At the same time, adherence to the gold standard limited governments’ ability to respond with monetary expansion, deepening deflation and unemployment worldwide. In short, the post-war financial order was fragile and heavily dependent on continuous credit; once that credit stopped, it unravelled rapidly into the Great Depression.
It is not difficult to see parallels being drawn with current developments in the Middle East and Europe—the two principal theatres of war. It remains within the realm of possibility that the United States could be drawn into a broader conflict shaped by competing strategic interests. The objectives of any future conflict may differ from those of the previous century, ranging from Greater Israel ambitions to restructuring elements of the international financial system, or disrupting emerging economic corridors such as China’s Belt and Road Initiative.
The summer period may provide President Trump with space to rebuild a pro-war narrative and recalibrate military strategy in response to Iran’s demonstrated non-conventional capabilities during the recent phase of conflict. The ongoing peace talks, maritime pressures, and apparent de-escalation may therefore represent a temporary pause—allowing time to address domestic considerations, manage alliances, and engage diplomatically with China.
For Pakistan, which has built much of its economic structure on remittances, loans, and financial support from the Middle East—particularly Saudi Arabia—this moment demands serious reflection. With the Saudi economy potentially under strain and diplomatic relations with the UAE facing uncertainty, the inflow of dollars from these sources cannot be taken for granted. If timely measures are not adopted to anticipate and mitigate these risks, the country’s economic stability and, by extension, its national security architecture could come under significant threat.