Daily Times

The threat of a $18 billion penalty from Iran looms over Pakistan’s head at a time when the country is already embroiled in economic turmoil. There’s no question that the Iran-Pakistan pipeline project did not pan out the way it was intended to.

Under the original agreement, Islamabad was meant to pay Iran nearly $1 million per day. Needless to say, this has not happened. Three years ago, Tehran notified Islamabad of its intention to move forward with arbitration court proceedings after Pakistan backed out of the agreement in lieu of increasing pressure from the US.

The pipeline agreement was first signed in 1995. It was seen as the perfect solution to both of their problems. Pakistan, for its part, is fighting an energy crisis and Iran looks to increase sources of income to compensate for the damages incurred by international sanctions. Despite repeated warnings from the US, Pakistan went ahead with its construction plans, prepared to deal with the aftermath.

It was clear at the time that entering a business partnership-particularly one that finances the energy sector-with the sanctioned country, could very well cause Pakistan itself to be sanctioned. But the benefits seemed to outweigh the potential consequences of defying the West.

In 2019, however, Pakistan announced that it could not continue with the project as long as Tehran was subject to US sanctions. It is not a coincidence that Islamabad began purchasing greater quantities of LNG from Saudi Arabia and Qatar that same year. Increased tensions between Riyadh and Tehran also contributed to the shift, with the former looking to reduce Iran’s role in providing regional energy security.

Iran has already threatened Pakistan with legal action numerous times. Desperate for allies and looking to increase its shares in the global natural gas market, Tehran feels betrayed and rightly so. But we cannot assume the sole responsibility for blocking the project.

Growing resistance from Washington and Riyadh, our closest allies, meant that the project was never going to be easy to realize, to begin with. If Iran is looking to settle scores, it should turn its attention to the US instead. *