The ceasefire brokered through the June 18 Islamabad Memorandum of Understanding has effectively collapsed after Iran attacked three commercial tankers in the Strait of Hormuz and the United States responded with strikes on more than 170 Iranian military targets, including air defence systems and Revolutionary Guard vessels (CNN; Al Jazeera; ABC News). President Trump declared the ceasefire “over.” Iran retaliated with drone and missile attacks targeting US military installations in Kuwait and Bahrain, prompting emergency alerts across the Gulf states and bringing traffic through the Strait of Hormuz to near-standstill.
Iran’s tanker attacks — which Tehran framed as a response to US failures to comply with the MoU’s provisions on frozen asset release and alleged continued intelligence-sharing with Israel — were the immediate trigger. The collapse brings to an end a 60-day ceasefire that had reduced open hostilities since mid-June but had never resolved the underlying disputes over Iran’s nuclear programme, US sanctions, and the future of Israeli-Iranian military confrontation.
Pakistan and Qatar scramble
Pakistan, which co-architected the Islamabad MoU as the principal intermediary between Washington and Tehran, immediately called on all parties to uphold their commitments under the agreement and said there was “no alternative to continued engagement, dialogue and diplomacy” (Al Jazeera). Pakistan and Qatar are jointly working to bring both sides back to the table, according to diplomatic sources cited by multiple outlets.
The ceasefire’s collapse is a significant setback for Pakistani diplomacy. Islamabad’s rehabilitation in Western capitals and its increased strategic relevance over the past year were substantially built on its unique role as a channel to Tehran — a role that justified the attendance of PM Shehbaz at Khamenei’s state funeral and that gave Pakistan leverage in conversations about Gulf security, CPEC financing, and IMF programme credibility. A durable resumption of US-Iran conflict would not extinguish that role entirely, but it would diminish the value of the MoU architecture that Pakistan helped build.
Regional and economic effects
The Strait of Hormuz handles approximately 20% of global oil trade. Its near-shutdown during the exchange of strikes has already driven emergency energy price movements on global markets — a direct transmission to Pakistan’s LNG import costs, which had only recently stabilised after the earlier Gulf disruption. The KSE-100 fell 4,626 points on July 9 in response to the renewed hostilities.
Pakistan’s immediate diplomatic priority is stopping a full resumption of the war. The Doha technical talks channel — established under the Islamabad MoU framework — remains open, and both Pakistan and Qatar are using it to facilitate backchannel communication even as the public ceasefire has formally been declared ended.
