The fall out of recent Iran – USA Israel war exposed, with shocking precision, how vulnerable Pakistan remains to disruptions in sea-borne energy supplies. Pakistan’s monthly fuel import bill nearly doubled, overnight when Iran closed the Strait of Hormuz. Saudi Arabia had to step in as an emergency supplier for Pakistan which had no fallback option of its own. That exposure was the starting point for any honest discussion of Iran-Pakistan energy cooperation in a post-war environment.

The two countries have long had a gas pipeline agreement that existed more on paper than on ground. The commercial agreement was signed in 2009 and the project was formally inaugurated in March 2013. This inauguration at Pakistan’s end, seemed to be more of a political ploy, for local audience, by a government which was completing its constitutional tenure, therefore, continuity of policy remained elusive and progress stalled. However, Iran completed its section of the pipeline, running over 1,100 kilometers from the South Pars gas zone through Sistan-Baluchistan to the Pakistani border, investing an estimated two billion dollars under a stringent sanction regime. Pakistan, required to build approximately 780 kilometers from the border to Nawabshah through Baluchistan and Sindh, announced construction of an initial 80-kilometre section in 2024 to avoid penalty payments, but that too failed to materialize. Legal demurrages were paid by Inter State Gas Systems to manage subsequent arbitration which crossed Rs 350 million in 2024-25 alone. By January 2026, Islamabad citing US sanctions, lower domestic gas demand, and Qatar’s LNG supply commitments, was attempting an out-of-court settlement to abandon the project entirely, which Iran........

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