Pakistan finds itself at the crossroads of a significant diplomatic shift following China’s successful mediation between Saudi Arabia and Iran. For decades, the rivalry between these two regional heavyweights placed Pakistan in a precarious position, forcing it to walk a tightrope between its religious, economic, and geopolitical interests. However, the thaw in Saudi-Iranian relations presents a golden opportunity for Islamabad to recalibrate its foreign policy, forging stronger ties with both nations while avoiding past pressures to choose sides.
The significance of this moment cannot be overstated. Saudi Arabia and Iran have historically been at odds, engaging in proxy conflicts across the Middle East, from Yemen to Syria. Their rivalry often spilled over into Pakistan, exacerbating sectarian tensions and influencing its diplomatic and economic policies. However, as the two adversaries find common ground, Pakistan now has a unique opportunity to enhance trade, strengthen security partnerships, and complete long-stalled energy projects, such as the Iran-Pakistan gas pipeline.
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China's intervention in easing the hostility between Riyadh and Tehran was a geopolitical masterstroke. By bringing these two powerhouses to the negotiation table, Beijing not only reinforced its role as a global peace broker but also reshaped the strategic dynamics of South Asia and the Middle East. This development directly benefits Pakistan, which has long struggled to maintain equilibrium in its relations with both nations. The opportunity to establish balanced ties without external pressure is an unprecedented diplomatic advantage.
A mix of religious solidarity, economic necessity, and strategic compulsions has traditionally driven Pakistan’s foreign policy. Since its inception, Islamabad has maintained close ties with Saudi Arabia, relying on the Gulf monarchy for financial aid, energy resources, and diplomatic support in international forums. Saudi Arabia has, in turn, benefited from Pakistan’s military expertise, with Pakistani troops historically deployed to safeguard the kingdom.
On the other hand, Iran, Pakistan’s immediate neighbor, shares deep cultural, historical, and economic ties with Islamabad. The two countries have cooperated in areas such as border security and trade, but their relationship has often been strained due to external pressures. The United States, a key Saudi ally, has long discouraged Pakistan from engaging in robust economic partnerships with Iran, particularly in the energy sector.
With the China-mediated reconciliation between Riyadh and Tehran, Pakistan is now free to pursue a more balanced approach. The previous diplomatic dilemma of having to choose one partner over the other has been eliminated, allowing Pakistan to strengthen its engagements with both without fear of alienation. Furthermore, this shift offers an opportunity to explore broader regional partnerships that could bolster Pakistan’s economic and political standing.
One of the most tangible benefits of improved Saudi-Iranian relations for Pakistan is the potential for increased trade. Pakistan’s exports to Saudi Arabia have already been on the rise, climbing from $401 million in 2017 to $507 million in 2022, according to the OEC World Report. With fewer geopolitical barriers, trade volumes with both Saudi Arabia and Iran are expected to see a further boost. Moreover, this transformation in relations could pave the way for broader economic collaborations that previously seemed unfeasible.
The recent détente also paves the way for Pakistan to explore trilateral economic cooperation. By leveraging its geographic location, Pakistan can serve as a trade corridor linking the Middle East, South Asia, and Central Asia. This could be particularly beneficial in sectors such as agriculture, textiles, and manufacturing, where Pakistan has untapped potential. Furthermore, establishing stronger trade networks could improve employment opportunities and economic resilience within the country.
Moreover, Saudi Arabia’s Vision 2030 and Iran’s integration into the Belt and Road Initiative (BRI) present new economic opportunities. China, Pakistan’s closest ally, is keen on aligning Saudi Vision 2030 with the BRI, and Islamabad stands to gain by facilitating this convergence. Encouraging Saudi investments in BRI-related projects within Pakistan, particularly in the China-Pakistan Economic Corridor (CPEC), could spur economic growth and job creation. Additionally, an influx of investment in infrastructure and energy projects could support long-term economic development.
For years, the Iran-Pakistan gas pipeline has remained a dream deferred, mainly due to American opposition and Saudi reluctance to see Islamabad deepen ties with Tehran. However, with the rapprochement, Pakistan now has the opportunity to revisit and expedite this crucial energy project. Furthermore, this initiative could serve as a stepping stone for future energy partnerships that enhance regional stability and self-sufficiency.
The pipeline, which aims to transport Iranian natural gas to Pakistan, could significantly ease the country’s chronic energy shortages. Iran, which holds nearly 24% of the Middle East’s total oil reserves, is eager to expand its energy exports. Meanwhile, Saudi Arabia, with its immense diplomatic influence, could play a role in mitigating U.S. opposition to the project, especially given Washington’s reliance on Riyadh for oil market stability. Moreover, if managed efficiently, the completion of this project could reduce energy import costs and foster greater industrial productivity within Pakistan.
If Islamabad successfully navigates these diplomatic waters, the completion of the Iran-Pakistan gas pipeline could mark a transformative moment for the country’s energy security and economic stability. Additionally, this could encourage foreign investors to view Pakistan as a viable partner in large-scale energy initiatives.
The Shanghai Cooperation Organization (SCO) offers another crucial platform for Pakistan to strengthen cooperation with both Saudi Arabia and Iran. Iran is now a permanent member of the SCO, while Saudi Arabia holds the status of dialogue partner. This organization serves as a vital forum for discussing regional security, economic cooperation, and counter-terrorism efforts. Moreover, Pakistan’s active participation in this forum could help establish it as a key regional stakeholder.
Pakistan can leverage the SCO to foster deeper security cooperation with both nations. The organization’s focus on counter-terrorism aligns with Pakistan’s efforts to combat extremism, particularly along its border regions. Greater trilateral collaboration within the SCO framework could help curb the influence of extremist groups, ensuring regional stability. Furthermore, coordinated counter-terrorism strategies could improve internal security and economic confidence.
One of Pakistan’s persistent internal challenges has been sectarian violence, often fueled by external actors. In the past, Iran has been accused of supporting Shia groups in Balochistan, while Saudi Arabia has historically influenced Sunni factions. However, with improved Saudi-Iranian ties, Pakistan now has a chance to mitigate sectarian conflicts within its borders.
By maintaining balanced relations with both countries, Islamabad can discourage proxy influences and promote sectarian harmony. Encouraging interfaith dialogues, religious cooperation, and mutual respect between Sunni and Shia communities could play a crucial role in national stability. Moreover, governmental policies focused on social cohesion and religious tolerance could further strengthen internal unity.
While the prospects for Pakistan in the wake of the Saudi-Iranian rapprochement are promising, challenges remain. For one, despite China’s mediation, the deep-seated mistrust between Riyadh and Tehran could resurface, thereby complicating Pakistan’s delicate balancing act. Additionally, the United States’ stance on Iran remains a crucial factor; Washington could still exert pressure on Islamabad to limit its engagement with Tehran, particularly concerning the gas pipeline. Moreover, the evolving global energy market and shifting alliances could present further hurdles.
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Furthermore, Pakistan must be cautious in managing its financial dependencies. While Saudi investments are crucial for economic stability, over-reliance on Riyadh could compromise Islamabad’s ability to maintain a genuinely independent foreign policy. Similarly, engaging with Iran on economic projects must be done in a manner that does not antagonize Western allies or disrupt existing trade partnerships. Additionally, strategic decision-making will be required to ensure sustainable economic growth without undue external influence.
The Saudi-Iran rapprochement represents a significant shift in regional dynamics, offering Pakistan a once-in-a-lifetime opportunity to solidify its diplomatic standing. By strengthening trade relations, reviving stalled energy projects, and leveraging platforms like the SCO, Pakistan can maximize the benefits of this newfound regional stability.
As the dust settles on this historic diplomatic breakthrough, Islamabad must act with foresight and strategic intent. The road ahead is filled with opportunities but also challenges that require careful navigation. If handled wisely, Pakistan’s balancing act between Saudi Arabia and Iran could redefine its role in the region, ushering in a new era of prosperity, stability, and diplomatic strength.
