Iranian Proxy Readied Red Sea Strike as Hormuz Calm Sits on Shaky Ground

Iranian Proxy Readied Red Sea Strike as Hormuz Calm Sits on Shaky Ground With an Iranian-linked group completing attack preparations on Red Sea shipping, the deal that collapsed crude's blockade premium faces its first live test. An Iranian proxy group had completed preparations to attack shipping near the Red Sea gateway by Thursday (2026-07-16), Reuters reported, a development that arrives while ICE Brent crude front-month sits at $84.86 a barrel — a level that already reflects a largely unwound Hormuz risk premium.^6,5 The context matters. At the height of the Hormuz closure, some analysts had expected crude to move into the mid-to-high $100 range. Ships reportedly paid around $2 million on average to transit the strait, according to an Iranian lawmaker cited at the time. When Donald Trump declared the deal "complete" and announced the "immediate toll-free reopening of the Strait of Hormuz," prices crashed below $85 a barrel. That settled level has held.⁵ Pakistan's army chief Asim Munir registered what the Economist described as a geopolitical success around that juncture. Hours before a ceasefire between Washington and Tehran was due to expire on April 21 (2026-04-21), with renewed strikes still threatened, Munir's engagement earned Islamabad a diplomatic visibility it had not previously held. The Economist's framing was cautious — noting that optimism about the military strongman's capacity to deliver deeper change may outpace what is achievable — but the shift in standing was real.¹ The strategic logic behind Pakistan's relevance is geographic. Islamabad sits at the intersection of Gulf energy flows and the overland Eurasian corridors that gained traction after the Ramadan War permanently altered risk calculations for Gulf shipping. Before Houthi attacks disrupted Red Sea traffic beginning in 2023, 70 ships transited daily and the route carried 12% of seaborne oil trade and 8% of global LNG trade in the first half of that year, according to data cited by OilPrice.com. Any sustained disruption to that corridor redirects flows through alternative routes, and Pakistan's geography becomes material to how those flows move.⁴ China has been building exposure to those alternative corridors. Beijing has purchased more than $367 billion of Russian fossil fuels since the start of the war in Ukraine, according to data from the Centre for Research on Energy and Clean Air, a buying programme that runs through supply lines well removed from contested maritime chokepoints. Chinese policymakers have separately flagged concerns about major powers attempting to control shipping in the Strait of Hormuz, framing the vulnerability in terms that extend well beyond any single episode.^3,2 Gulf shippers are drawing similar conclusions. The Ramadan War prompted permanent hedging against the risk of further American and Israeli action in the region, including Trump's publicly stated threats against Iranian infrastructure, OilPrice.com reported. That shift in routing decisions favors Pakistan regardless of whether any specific attack materializes.⁴ But Thursday's (2026-07-16) Reuters report reintroduces a more immediate variable. Iranian proxy readiness to strike near the Red Sea gateway suggests the conflict's residual armed actors have not stood down in line with the diplomatic settlement. Red Sea disruption, as the 2023-2024 Houthi campaign demonstrated, transmits rapidly into LNG freight costs and refined product cargoes routed around the Cape of Good Hope, not just crude benchmark prices.^6,4 JKM, the Asian LNG benchmark, held at $19.93 per MMBtu on Thursday (2026-07-16). Heating oil futures rose 1.49% on the same session. Whether those moves reflect the Reuters report or broader factors, the directional exposure is clear: any sustained Red Sea disruption would push freight-intensive products harder than crude itself.⁶ Pakistan's diplomatic leverage depends partly on whether the ceasefire holds. A renewed flare-up would reinforce Islamabad's value as an intermediary. It would also test whether Munir's geopolitical credibility translates into durable influence, or whether, as the Economist cautioned, the optimism surrounding his regional successes outpaces what Pakistan can actually deliver.¹ If an attack does materialize near the Red Sea gateway, crude markets will reprice the durability of the Hormuz settlement. At that point, Pakistan's next diplomatic move will matter more than its last one.⁶