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According to officials in Islamabad, Saudi Arabia has agreed to restart at least US$1.5 billion a year in oil aid to Pakistan in July, as Riyadh is struggling to counter Iran’s influence in the region.
Last year, after Islamabad pressured Saudi Arabia to criticize India for lifting sanctions on India, Riyadh asked Pakistan to repay a US$3 billion loan. Kashmir’s special status.
But after Prime Minister Imran Khan met with Saudi Crown Prince Mohammed bin Salman in May, the dispute between the two long-time allies eased.
Analysts said that as Saudi Arabia began its diplomatic efforts with the United States and Qatar to establish a front against Iran, news of an oil agreement with Pakistan spread. Riyadh lifted a three-year blockade of Qatar in January in what experts said was an attempt to curry favour with the newly elected Joe Biden.
Pakistan has moved closer to Saudi Arabia’s regional competitors Iran Together with Malaysia, Turkey seeks to establish a Muslim group to compete with the Saudi-led Organization of Islamic Cooperation.
Khan has established a close relationship with President Recep Tayyip Erdogan, encourage Pakistanis watching Turkish historical TV series Release Ertugrul (Ertugrul’s Resurrection) because of its description of Islamic values.
Ali Shihabi, a Saudi commentator familiar with the leadership’s thinking, said that “bad blood” has accumulated between Riyadh and Islamabad, but the recent bilateral meeting “clarified the air” and resetting the relationship to oil credit payments would be very difficult. The degree of fast restart.
A senior Pakistani government official said: “Our relationship with Saudi Arabia has changed from [a downturn] Earlier.Saudi Arabia’s support will be achieved through deferred payment [on oil] Saudi Arabia is seeking to resume its investment plan in Pakistan. ”
Saudi Arabia’s offer was less than half of the previous $3.4 billion oil facility, which was shelved due to tensions.
But Fahad Rauf, head of equity research at Ismail Iqbal Securities in Karachi, said: “Any amount of dollars helps because we face current account crises time and time again. At prices above $70 per barrel, everything helps.”
Pakistan’s foreign exchange reserves exceeded 16 billion U.S. dollars in June, and in 2019 it was about 7 billion U.S. dollars before it entered the U.S. dollar.6 billion IMF planI.
Robin Mills of Qamar Energy, a consulting firm, said: “Saudi Arabia and Pakistan are allies, but their relationship has been unstable. The relationship between Pakistan and Iran is better than you think.”
Mills said that given that Iran is preparing to increase its oil exports with the United States while considering easing sanctions, the timing of Saudi Arabia’s gesture is “interesting.”
“The Saudis are taking on the task of building bridges more broadly. They are trying to mend the gap with the United States and restore relations with Qatar,” he said.
Ahmed Rashid (Ahmed Rashid), the author of books on Afghanistan, Pakistan and the Taliban, said that a variety of factors may have prompted Riyadh to restart oil facilities.
It may be “partly related to the United States Need baseHe said that Pakistan launched a counter-terrorism attack in Afghanistan, but added that its primary task may be to prevent Islamabad from falling under the influence of Tehran.
Rashid pointed out that Pakistan is caught between China and the United States, which have invested billions of dollars in infrastructure projects.
“Pakistan must proceed with caution. It relies on China for the Belt and Road Initiative and the West for loans,” Rahi said. “This is a very complicated game.”
Anjli Raval in London and Simeon Kerr in Dubai
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