Sanctions saga and Pak-Iran project

The US State Department Spokesperson, Matthew Miller has recently told the media that the United States does not support the Pakistan Iran gas pipeline project. According to the American diplomat, the US always advises those who do business with Iran about the risk of getting close to and in touch with the US sanctions and would advise everyone to consider this very carefully.

The Pak-Iran gas pipeline project has faced severe setbacks from US sanctions against Tehran since the beginning about over a decade ago. After a long delay and haphazard policy, the Pakistani authorities recently decided to construct a nearly 80 km long gas pipeline from Pak-Iran border to the Strategic city of Gawadar to satisfy its growing energy needs. Meanwhile, the newly elected Shehbaz government was preparing to take up the case with the Biden administration to discuss Pakistan’s worst energy crisis and forge consensus regarding exemption from the US sanctions. The United States has expressed its opposition to Pakistan’s proposal for constructing a gas pipeline and signals about the possibility of US sanctions are very clear that would not only affect US political and economic relations with Pakistan but significantly obstruct IMF’s cooperation with the country whose policies are highly influenced by the US decisions/ policies.

Iran, on the other hand, has completed its portion of the pipeline more than a decade ago, and Tehran has threatened to take Pakistan to court over its failure to complete the pipeline project, which could result in a $ 18 billion penalty for Pakistan. Pakistan has been struck into a very complex situation, despite an acute shortfall of energy resources the country faces economic sanctions on one hand and a bulk of penalty on the other. In response to this situation, Federal Minister for Petroleum and Power, Musadik Malik announced the government’s decision to seek a waiver from US sanctions specifically for the Iran-Pakistan gas pipeline project. The Pakistani side aims to present political and technical reasons to secure the waiver and avoid penalties while constructing its share of the pipeline inside Pakistan.

Historically, Pakistan’s case is genuine and this is an ideal way forward to tackle the energy crisis and avoid backlash from the west. If Pakistani authorities would be able to present their case in a logical manner, this puzzle can be solved and Pakistan interest can be rescued diligently.