Saudi Arabia Selling More Oil to India Will be Good For Pakistan

When Mohammad bin Salman (MBS) became Crown Prince and de facto ruler of Saudi Arabia in 2017, he realised that Saudi Arabia had both an economic problem and an image problem. Although Saudi Arabia remains a wealthy nation due to its vast oil exporting industry, MBS realised early on that the economy was not sufficiently diverse so as to weather long term volatility in the price of oil. As such, MBS initiated Project 2030 which aims at diversifying the economy away from an over-dependence on energy exports.

MBS also knew that due to the country’s strict theocratic society, its involvement with extremism outside of its borders and its allegedly harsh treatment of women, he needed to give the Kingdom a thorough image makeover in order to attract as much investment as possible into the country prior to 2030.

While these realisations on the part of MBS were not related to Iran, the Islamic Republic remains Saudi Arabia’s main regional opponent. Within this context, as part of an apparent deal with the United States, Riyadh has agreed to boost its oil production to fill gaps in the market that will self-evidently widen due to the fact that the US will now put sanctions on any country in the world that continues to purchase energy from Iran.

As India is one of Iran’s top customers for energy, this means that in spite of protests from New Delhi, there is a high likelihood that India will be purchasing a great deal more oil from Saudi Arabia instead of from Iran. In many ways this should not be surprising as India and Saudi Arabia as well as India and Saudi Arabia’s closest ally the UAE have steadily improved relations over the last year.

During his recent Asian tour, MBS visited India after a highly successful visit to Pakistan and just before another successful visit to China. This makes it clear that Saudi Arabia wants to expose itself to ever more international markets but at the same time, it helps to understand that while all of Saudi Arabia’s customers are important to Riyadh, not all are strategic partners.

Pakistan and Saudi Arabia have always had what can be called a “special relationship” and this is not going to change. What is changing is the nature of the relationship. While it used to be that Saudi Arabia was an important provider of liquid finance to Pakistan in exchange for military training, intelligence cooperation and other security related issues, today, Pakistan is increasingly seen as a vital strategic partner for a Saudi Kingdom that seeks greater sustainable long-term economic connectivity to the Asian mainland whilst seeking ever more integration into the Belt and Road initiative of which Pakistan is a vital member owing to CPEC and related large scale projects.

As such, the existing friendly atmosphere between Islamabad and Riyadh has only helped to expedite a Saudi-Pakistan partnership that is today more balanced and thus more of a win-win partnership than ever before. One could even make the argument that due to Saudi Arabia’s increased desire for rapid economic diversification, Pakistan is today more important to Saudi Arabia than Saudi Arabia is to Pakistan.

As all of these wheels are being set in motion, Pakistan’s Prime Minister Imran Khan just paid an historic visit to Iran where he transformed rapidly deteriorating relations into a win-win accord to jointly fight terrorists on the border between the two countries. This is something that could have and should have happened years ago and it is to Imran Khan’s supreme credit that it has finally happened. This major development occurred at the same time as the sacking of major Iranian General who had uttered defamatory remarks against Pakistan’s state institutions earlier in the year. Thus, taken in totality, it seems that at least for the time being, Iran-Pakistan ties are back on track in a positive manner.

When taken as a whole, it is becoming clear that Pakistan is able to successfully balance relations between Iran and Saudi Arabia in the same way that it has already proved astute at balancing relations between the Saudi-Emirati partnership on the one hand and the Turkey-Qatar partnership on the other.

But while Pakistan continues to act as the Switzerland of the Ummah, India’s attempts at casting itself as a power capable of balancing foreign relations have been far less impressive. India is now in a position where in spite of its grandiose rhetoric, it is nevertheless dutifully capitulating to America’s demands that Iran must be increasingly isolated. After being left to chew on sour grapes after being sidelined in the Afghan peace process, now India may well turn closer to Saudi Arabia but ultimately, India’s relations with Saudi Arabia are strictly economic while Saudi Arabia’s relations with Naya Pakistan (New Pakistan) are increasingly strategic. This difference is a crucial one. While Riyadh is happy to be India’s growing energy supplier when it comes to Belt and Road connectivity and development opportunities in the CPEC port city of Gwadar, Saudi Arabia will be looking squarely to its old friend Pakistan.

This means that for all India might say about “co-opting” Saudi Arabia while lying about the state of its relations with Iran, in reality it is Pakistan that has been able to consistently improve its all-weather friendship with China, usher in an era of cooperation with Iran, transform a long term Saudi friendship into a strategic partnership and all the while remaining on excellent terms with Turkey and Qatar. The fact that US Senator Lindsey Graham recently admitted that Pakistan had been correct about the Afghan situation whilst previous US policy makers got it wrong, is a further indication that even as Pakistan-US relations are strained, the US ultimately needs Pakistan to insure long term stability in Afghanistan, just as the US has always needed Pakistan for this purpose.

In this sense, when it comes to a south Asian power that is quietly but confidently balancing between multiple external powers, this country is Pakistan. This is why Saudi Arabia’s pivot to India might be exploited by both Indian and Iranian media for self-interested purposes. But in spite of this, the fact that Saudi-Indian ties are merely pragmatic rather than strategic proves that Pakistan clearly has the upper hand in balancing between important regional and world powers.

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