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Saudi Arabia has agreed to restart oil aid to Pakistan worth at least $ 1.5 billion a year in July, according to Islamabad officials, while Riyadh works to counter Iran’s influence in the region.
Riyadh demanded that Pakistan pay a $ 3 billion loan last year after Islamabad pressured Saudi Arabia to criticize India’s cancellation for Special state of Kashmir.
But the acronym between the two longtime allies has eased after Prime Minister Imran Khan met with Saudi Crown Prince Mohammed bin Salman in May.
Analysts reported that Saudi Arabia is embarking on a diplomatic push with the United States and Qatar to build a front against Iran. Riyadh lifted a three-year blockade in Qatar in January so experts said it was an attempt to favor the newly elected Joe Biden.
Pakistan had come closer to Saudi Arabia’s regional rivals Iran and Turkey, which, along with Malaysia, have tried to establish a Muslim bloc to compete with the Saudi-led Islamic Cooperation Organization.
Khan has developed a strong relationship with President Recep Tayyip Erdogan, encouraging Pakistanis will watch the historical Turkish television series Ertugrul released (The Resurrection of Ertugrul) for his representation of Islamic values.
Ali Shihabi, a Saudi commentator familiar with the thought of leadership, said “bad blood” had accumulated between Riyadh and Islamabad, but recent bilateral meetings had “emptied the air” and re-established relations as the oil credit payments restart soon.
A senior Pakistani government official said: “Our relations with Saudi Arabia have recovered [a downturn] before. Saudi Arabia’s support will come through deferred payments [on oil] and the Saudis want to resume their investment plans in Pakistan. ”
Saudi supply accounts for less than half of the previous $ 3.4 billion oil plant, which was suspended when ties were broken.
But Fahad Rauf, head of equity research at Ismail Iqbal Securities in Karachi, said: “Any amount of dollars helps because over and over again we face a current account crisis. And with these prices north of 70 dollars a barrel, everything helps ”.
Pakistan’s foreign reserves topped $ 16 billion in June, compared to about $ 7 billion in 2019 before it entered its dollarsIMF 6 billion programjo.
Robin Mills told Qamar Energy: “Saudi Arabia and Pakistan are allies, but their relationship has always been rocky. And the Pakistan-Iran relationship is better than you might think. “
Mills said the timing of the Saudi gesture was “interesting” as Iran was preparing to intensify oil exports with the US considering easing sanctions.
“The Saudis have a mission to build bridges more generally. They have tried to repair fences with the US and there is also a resumption of relations with Qatar, “he said.
Ahmed Rashid, author of books on Afghanistan, Pakistan and the Taliban, said there were several factors that could have encouraged Riyadh to restart the oil facility.
It may be “partially linked to the American need for bases“To launch counterterrorism attacks in Afghanistan from Pakistan,” he said, but added that his priority was probably to prevent Islamabad from falling under Tehran’s influence.
Rashid noted that Pakistan was caught between China, which has invested billions of dollars in infrastructure projects, and the United States.
“Pakistan has to play it safe, it depends on China for Belt and Road, it depends on the West for loans,” Rashi said. “This is a very complex game.”
Anjli Raval in London and Simeon Kerr in Dubai
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