According to a Financial Times article written by Anjili Raval and Simeon Kerr, Saudi Arabia has agreed to renew oil aid to Pakistan worth at least $1.5 billion per year in July, officials in Islamabad said. This move is seen as an attempt by Saudis to counter Iran’s influence in the region amidst the ongoing negotiations between Iran and the United States that will probably ease the sanctions on Iran’s oil export.
After Islamabad urged Saudi Arabia to criticize India’s nullification of Kashmir’s special status, Riyadh requested that Pakistan payback a $3 billion loan last year. However, after Prime Minister Imran Khan met Saudi Crown Prince Mohammed bin Salman in May, the tension has lessened.
Beyond these issues, the new oil points out the further improvement of bilateral relations between Saudi Arabia and Pakistan. As put by a senior Pakistan official in the news “Our relations with Saudi Arabia have recovered from a downturn earlier. Saudi Arabia’s support will come through deferred payments on oil and the Saudis are looking to resume their investment plans in Pakistan.”
This new oil deal with Pakistan comes as Saudi Arabia begins a diplomatic drive with the US and Qatar to form a front against Iran. Pakistan has also moved closer to Saudi Arabia’s regional foes Iran and Turkey, which, along with Malaysia, have been attempting to form a Muslim bloc to rival the Saudi-led Organization of Islamic Cooperation.