File photo of under-construction gas pipelines
A recent delegation from Russia visited Pakistan and discussed the possibility of supplying discounted gas to the energy-starved country. Speaking with state-run news agency TASS, Deputy Prime Minister Alexander Novak said Russia aimed to send natural gas to markets in Afghanistan and Pakistan, in the long-term, “either using the infrastructure of Central Asia, or in a swap from the territory of Iran.”
A key question remains how the pending deal will be received by the West, which continues to censure Russia over its ongoing invasion of Ukraine. Pakistan’s economic crunch also raises concerns over its ability to pay for the pipeline and the gas. Russia has hinted that it would accept payments in the currency of “friendly” countries—perhaps China—which would give Beijing’s Yuan more sway compared to the U.S. dollar. Russia, meanwhile, is desperate for foreign exchange so it has only to gain, as its inflows are severely limited by a G7/E.U. oil cap and sanctions because of Ukraine.
The developing scenario could alter the foreign policy and political roadmap of the region. Pakistan has already been moving away from its traditional alliance with the U.S., which has leant toward India to implement its anti-China foreign policy in the Indo-Pacific region. India will benefit from this emerging scenario despite the paradox of being a major trading partner of China while also collaborating with the U.S. Pakistan and Russia, meanwhile will have a tough road ahead as they have had no commercial ties for decades.
Islamabad has few options before it. It must pay for energy bills it can’t afford without going broke and Russia’s promised cheaper oil—suggested by vague promises from Moscow—will obviously help its balance of payments crisis and ballooning trade deficit. At the same time, it wants to avoid antagonizing the U.S. and its friends in the Gulf, Pakistan’s main energy suppliers, especially as Islamabad negotiates the revival of a Washington-backed IMF bailout and deferred oil payments from the Saudis and the Emiratis. There is no magic wand to settle these issues; the road ahead will be long and difficult.