The recent spike in tensions between the United States and Iran should serve as a good opportunity for Pakistan to plan out its strategy to ensure its energy security in case of a possible war in its volatile neighborhood.
Though, hostilities lasted for a week or so, they pushed the international oil prices to four-month high, arousing fears of an all-out war in the region, which is a vital route for global oil supplies.
During the crisis, President Donald Trump announced the US was no longer dependent on Gulf oil to meet its energy needs as it already had made huge shale oil discoveries. However, its European allies as well as rest of the world still largely depend on the Gulf oil and a looming fear of war has turned the region into a tinderbox.
Pakistan needs not only to diversify from costly oil to reduce its burgeoning import bill but it also needs to ensure its energy security so that energy supplies continue uninterrupted in case of a crisis in the Gulf region.
In order to reduce its dependence on expensive oil, Pakistan has struck a deal with Qatar for LNG (liquefied natural gas) supplies and is looking to sign similar deals with other LNG suppliers but ironically these supplies also come through the volatile Gulf region.
In order to diversify its energy mix and limit dependence on oil, Pakistan has been in talks for two important energy projects for decades but both projects have been hamstrung by regional security situation, political, geopolitical, and geostrategic issues.
The first project envisages supply of natural gas from Turkmenistan’s rich gas reserves in Daulatabad through a pipeline to Afghanistan, Pakistan and eventually to India.
This project has been on the table since the 1990s but it could not be materialised because of the conflict in Afghanistan.
The agreement with regard to route of the pipeline, volume of the gas, price of the gas, transit charges etc has almost been reached but inordinate delay in a peace pact among warring sides in Afghanistan is the main obstacle in the implementation of this project.
Now that there are growing signs of a breakthrough in talks between Taliban and the United States as the former has hinted that an agreement with Washington could be reached by the end of January. One hopes this agreement would lead to a comprehensive deal among warring Afghan faction that would eventually lead to establishment of peace in the war-ravaged country. A peace deal in Afghanistan would definitely lead to implementation of these vital energy projects.
During the last PPP (Pakistan People’s Party) government, former president of Pakistan Asif Ali Zardari signed deal for laying down a natural gas pipeline from Iran to Pakistan.
A few years ago, Zardari speaking at a public ceremony had said the project if built could be the safest and shortest source of energy supplies for Pakistan in case of a crisis in the Gulf.
Iran has already laid the pipeline up to its border with Pakistan. However, US-led international sanctions on Iran have virtually crippled this project. Recent flare-up of tensions between Iran and the United States has further dimmed the chance of materialisation of this project.
Frustrated over Pakistan’s cold response to the project, Iran was reported to be mulling to go for international arbitration that could have led to imposition of hefty penalty on Pakistan. However, Tehran dropped the idea of litigation on persuasion of Pakistan.
Apart from the natural gas projects, Pakistan will have to look for more options to diversify its energy sources.
The contribution of nuclear energy to Pakistan’s energy mix is very low. Pakistan ought to increase share of nuclear energy in this regard.
Pakistan also needs to increase share of solar and wind energy to the energy mix. Moreover, it’s also imperative for Pakistan to step up domestic oil exploration.
The present government unnecessarily raised hopes for a huge oil discovery in the Arabian Sea and Prime Minister Imran Khan personally led this campaign.
However, no wells were found despite drilling more than 5500 meters deep into the sea.
Pakistan very meticulously stayed neutral in the recent escalation between Iran and the United States but made constructive efforts to reduce tensions between them.
From the very onset, Pakistan made it clear that it will neither side with any party during the conflict nor will it allow its soil to be used against any country.
Foreign Minister Shah Mehmood Qureshi visited Tehran and Riyadh as well as Washington and met his counterparts, other leaders, and officials from the three countries to help reduce the tensions.
But apart from these diplomatic efforts Pakistan also needs to prepare itself for any eventuality.
The policy of neutrality is positive but it also needs to make contingency plans particularly with regard to energy security in case the situation worsens in the region.
A country like Pakistan, confronted with grave economic challenges and energy insecurity, cannot let its challenges multiply and thus needs to come up with contingency plans to cope with all kinds of eventualities and a full-scale military conflict in Gulf region is one of them.
Prime Minister has to personally lead the effort to ensure energy security for the country. It is strange that during the Gulf crisis there has not been a single high-level meeting by the government to deliberate on the economic impact of the deteriorating situation and what would happen in case of a breakout of all-out hostilities.
With US-Iran as well as Iran-Saudia rivalry far from over, resurgence of Gulf crisis can’t be ruled out. It is therefore incumbent on the rulers to take full stock of the situation and formulate its strategy well on time.
Prime Minister in a recent interview has very rightly pointed out that a conflict between Saudi Arabia and Iran would be disastrous for Pakistan.
“We are trying our best to make sure that ties between these two countries do not deteriorate,” he said adding that’s why Pakistan was making efforts to defuse the situation.
Will all these well-intentioned efforts, Pakistan should prepare itself the worst too.
The writer is a senior journalist based in Islamabad