The Saudis have reached an oil deal with Pakistan to deal with Iran’s influence

Saudi Arabia has agreed to restart at least $ 1.5 billion a year in Pakistan’s oil aid in July, according to Islamabad officials as Riyadh works to address Iran’s impact on the region.

Riyadh asked Pakistan to repay $ 3 billion loan last year after Islamabad put pressure on Saudi Arabia to criticize India’s repeal Special status of Kashmir.

But the friendship between the two longtime allies has eased after Prime Minister Imran Khan met Saudi Crown Prince Mohammed bin Salman in May.

Analysts say Saudi Arabia will be informed of the oil deal with Pakistan when it is making a diplomatic push with the US and Qatar. Riyadh lifted the three-year blockade of Qatar in January when experts said it was an attempt to benefit the newly elected. Joe Biden.

Pakistan was closer to its rivals in the Saudi Arabian region Iran and Turkey, along with Malaysia, wanted to form a Muslim bloc to oppose the Saudi-led Organization of Islamic Cooperation.

Khan has established a strong relationship with President Recep Tayyip Erdogan, gratifying Pakistanis to watch the historical TV series in Turkey Ertugrul released (Ertugrul’s Resurrection) for its representation of Islamic values.

Ali Shihabi, a Saudi commentator familiar with the leadership’s thinking, said “bad blood” had accumulated between Riyadh and Islamabad, but had “cleared the air” at the last two meetings and re-established relations as oil credit payments resumed soon.

A senior Pakistani government official said: “Our relations with Saudi Arabia have been restored [a downturn] before. Saudi Arabia’s aid will come through deferred payments [on oil] and the Saudis want to revive Pakistan’s investment plans. ”

Saudi supply is less than half of the $ 3.4 billion of the previous oil facility, which was disrupted when ties were broken.

But Fahad Rauf, head of capital research at Ismail Iqbal Securities in Karachi, said: “Any dollar helps again and again because we are suffering from a current account crisis. Anything with these $ 70 barrel north prices helps.”

Pakistan’s foreign reserves totaled more than $ 16 billion in June, up from about $ 7 billion in 20196 billion IMF programni.

Qamar Energy consultant Robin Mills said: “Saudi Arabia and Pakistan are allies, but their relationship has always been rocky. And the Pakistan-Iran relationship is better than you think. “

Mills said the timing of the Saudi gesture is “interesting,” as Iran prepares to increase oil exports with the U.S. as it looks to ease sanctions.

“The Saudis are generally in charge of building bridges. They have tried to break down barriers with the US and also restore relations with Qatar, ”he said.

Ahmed Rashid, the author of books on Afghanistan, Pakistan and the Taliban, said there could be several factors that could push Riyadh to restart its oil facilities.

It may be “partially related to the American.” the need for bases”He said that Pakistan would launch counter-terrorism attacks in Afghanistan, but added that his priority was surely not to fall under the influence of Islamabad Tehran.

Rashid said Pakistan has been caught between China and the US, which has invested billions of dollars in infrastructure projects.

“Pakistan needs to act with caution, it is dependent on China on the Belt and Road, on revenge loans in the west,” Rashi said. “It’s a very complex game.”

Anjli Raval in London and Simeon Kerr in Dubai