War next door, dilemma in Islamabad

The war between Iran and the US-Israel alliance has now entered its third week. There is still no sign of de-escalation, despite US President Donald Trump declaring victory on several occasions. The US and Israel may have bombed Iran extensively and eliminated some of its top leadership, but Iran appears to be winning the battle of narratives. The prevailing perception is that despite the massive use of airpower, the Iranian system remains intact. The new Iranian Supreme Leader struck a defiant tone, vowing to continue the war and even threatening to block the Strait of Hormuz. Mojtaba Khamenei, in his first written message after assuming charge, also warned neighbouring countries that attacks could continue unless Gulf states stop allowing the US to use their military facilities.

In other words, Iran seems to be preparing for a long war of attrition, something Trump has repeatedly said he wants to avoid. Such a scenario is also a nightmare for the oil-rich Gulf states, which are already bearing the brunt of the escalating conflict.

The impact of this raging war is now being felt not just in the Middle East but across the world. The most immediate consequence is the surge in oil and energy prices. Pakistan has already been forced to raise petroleum prices by a record margin, and this may not be the end of the story.

For Pakistan, the conflict has profound implications, not only in the form of rising oil and gas prices but also in terms of larger geopolitical challenges.

If the war drags on, the chances increase that Pakistan may eventually be forced to pick sides, a dreadful scenario Islamabad desperately wants to avoid. So far, Pakistan has been treading cautiously, walking on a path full of diplomatic landmines where any misstep could prove disastrous.

Why is this conflict perhaps the biggest foreign-policy challenge Pakistan has faced in recent years? Iran is Pakistan's immediate neighbour. The two countries share a border of more than 900 km and have deep-rooted cultural, religious and political ties. In short, Pakistan cannot avoid the consequences if relations with Tehran become strained. Historically, Pakistan has tried to avoid getting entangled in the Iran-Gulf rivalry. The Yemen conflict was a case in point. Pakistan refused to send troops at Saudi Arabia's request to fight Iranian-backed Houthi rebels in Yemen. The decision was unprecedented and initially drew a strong reaction from Gulf countries.

However, Pakistan eventually managed to repair its ties with Gulf states, particularly after Iran-Saudi tensions eased before the current crisis erupted. Now, Iranian retaliatory attacks targeting US military bases and energy infrastructure in the Gulf have once again complicated the situation.

Iran has not limited its responses to the Gulf alone. Missiles have reportedly been fired towards Azerbaijan and Turkey as well. This development poses a serious challenge for Pakistan. Islamabad does not want to antagonise Iran, given its geographic proximity, but it also cannot afford to alienate Gulf countries or Turkey.

Islamabad is therefore hoping that the conflict ends sooner rather than later. If the war drags on, Pakistan's diplomatic position will become increasingly fragile. Yet there is also a potential upside. The conflict has exposed the limits of the Gulf states' longstanding reliance on the US for their security. As a result, they may be forced to rethink their defence doctrines to address future threats from Iran. This is where Pakistan could emerge as an important partner. Pakistan already has a defence cooperation arrangement with Saudi Arabia, and it would not be surprising if more regional countries sought closer military partnerships with Islamabad in the future.

Such a model could gradually replace the current arrangement in which Gulf states provide financial assistance to Pakistan, often seen domestically as embarrassing while Pakistan strengthens their defence capabilities in return for structured strategic and economic cooperation.