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Saudi-Iran Détente: Implications for Pakistan

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March 10, 2023, will go down in the archives of history as a significant day when decades-old rivals Iran and Saudi Arabia announced a deal that China facilitated to restore their diplomatic ties. Diplomatic ties between Iran and Saudi Arabia were cut off in 2016 after the Saudi execution of prominent Shia cleric Nimr Al-Nimr, which ignited antagonism and protests in Iran.

This recent development normalization of ties between Iran and Saudi Arabia is seen as a positive step towards. It will not only resolve long-standing tensions and conflicts in the Middle East but being the close neighbor of Iran, strategic partner of Saudi Arabia, and close ally of China, the deal is believed to bear significance for Pakistan as well. But how?


Sectarian perspective:

Being home to almost 20% of the population, the conflict between Iran and Saudi Arabia had severe consequences for Pakistan. It has to deal with religious and sectarian violence by extremist groups of both sides (Shia, Sunni) present in its territory whenever matters were intensified between Iran and Saudi Arabia.

Since the Iranian revolution of 1979, Pakistan has been the ground of proxy wars between Tehran and Riyadh. According to popular opinion,  Saudi Arabia provided financial and ideological backing to Deobandi Sunni militant groups. These groups were Sipah-E-Sahaba and Lashkar-E-Jhangvi.

These groups flourished during the Zia-ul-Haq government and aimed to curb the rising Shia influence after the 1979 Iranian revolution. And, to counter those Sunni militant groups, Iran offered support to Shia militants. According to Michael Kugelman, South Asia director at the Wilson Center, Pakistan is a highly vulnerable country to Iran and Saudi Arabia’s rivalry. It is because of its borders with Iran and its military and strategic alliance with Saudi Arabia.

With its 20% Shia population, whenever Pakistan sided with Saudi Arabia, it was targeted by militants based in Iran. Thus, Pakistan will be among the biggest winners if the deal works.

Shia population in Pakistan

Pakistan has been tormented by sectarian conflicts for decades. Saudi Arabia and Iran’s regional rivalry fueled the fire. Both countries tried to exert their influence by supporting their relevant sects. As a result of these sectarian conflicts, the Shia population, a present minority in Pakistan, was highly marginalized.

Improved relations between both states can assuage their sufferings by bringing religious tolerance to Pakistan. Therefore, normalizing ties between those two states could lead to a stable and peaceful middle east, eventually benefiting Pakistan.

Apart from that, ease of tensions between Tehran and Riyadh in the middle east would allow Pakistan to efficiently focus on rising terrorism, separatist movements in Baluchistan, and violent extremism especially associated with sectarian groups, those who are connected with groups like Daesh.

 Neutral foreign policy:

Although Pakistan always tried to balance the relationship between Iran and Saudi Arabia, it was significantly inclined towards Saudi Arabia due to its economic, strategic, and religious relations with the kingdom, straining ties with Iran. Thus, the détente between both states might allow Pakistan to practice a neutral foreign policy which will eventually help Pakistan strengthen ties with Iran and Saudi Arabia in both diplomatic and economic terms.

Amid the economic crises in the country due to climate change-induced floods, political instability, rising terrorism, and insurgencies in Baluchistan, Pakistan could surely use increased trade and investment from Iran and Saudi Arabia.Due to the reduced regional tensions, Pakistan can avoid being entangled in the zero-sum games of two archrivals opening diplomatic and economic opportunities.

Economic perspective:

Saudi Arabia and Iran are both significant oil-producing countries. Their ongoing conflict has impacted global energy markets, with oil prices fluctuating significantly in recent years. After drone attacks on Saudi Abqaiq and Khurais oil facilities, 5% of the world’s crude production was disturbed, raising oil prices to almost 10%. According to the International Energy Agency, Pakistan is heavily dependent on oil imports, accounting for around 30% of the country’s energy mix.

The recent deal between Saudi Arabia and Iran could potentially lead to increased stability in oil prices, which could benefit Pakistan’s energy security. According to the State Bank of Pakistan, the country’s petroleum imports accounted for 20% of the total imports in FY 2020-21. A more stable energy market could help to reduce Pakistan’s energy costs and support the country’s economic growth.

Additionally, Zeeshan Shah, a financial analyst at FINRA in Washington, believes that Saudi pressure on Pakistan has reportedly prevented Pakistan from limiting its trade with Iran, including the project gas pipeline, thus reducing its economic, political, and strategic maneuverability. The Iran-Pakistan gas pipeline is a project that would allow Iran to export its natural gas to Pakistan, providing much-needed energy to the country.

Iran-Pakistan Gas pipeline

The pipeline would run from Iran’s South Pars gas field to Pakistan’s border and be approximately 1,800 kilometers long. The project costs around $7 billion, providing Pakistan with 750 million cubic feet of gas daily. The Saudi-Iran deal could provide a more stable environment for the completion of the Iran-Pakistan gas pipeline, thus reducing the prevalent energy insecurity in Pakistan.

Besides, the Saudi-Iran reproaching, according to Chairman of the Russian State Duma Committee on International Affairs Leonid Slutskby, will unlock the full potential of the North-South Transport Corridor (NSTC) by connecting it to Gulf Cooperation Council (GCC) and to a series of promised mega projects between India and Russia that run through Iran. Pakistan can also benefit from these programs to connect with Iran, Russia, and Azerbaijan.


Thus, this recent deal brokered by China between Saudi Arabia and Iran has the potential to have significant positive impacts on Pakistan. Reducing tensions and proxy wars, increasing regional stability, improving energy security, and growing potential for regional cooperation could all benefit Pakistan’s economy and security.

Pakistan should maintain a balanced approach in its relationships with Saudi Arabia and Iran and work towards maximizing the potential positive impacts of the recent deal. Thus, this rapprochement is a watershed moment in international relations that would have spillover effects across the globe, especially for Pakistan, plagued by the Iran-KSA.

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The writer is a graduate of International relations from Quaid-i-Azam University and worked as a
researcher with the Arms Control and Disarmament Center at the Institute of Strategic Studies
Islamabad. She can be reached at sodozai.alishbakhan@gmail.com

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