Pakistan’s balancing act in the Gulf is getting harder 

Pakistan has emerged as a critical regional stakeholder since the conflict between the United States and Iran began in late February. Its role in mediating between the two has raised the country’s global profile. Pakistan is also an active player in regional security through its mutual defense agreement with Saudi Arabia. As the conflict drags on, this multi-faceted engagement is turning into a tightrope act. 

Pakistan’s ties with the Arab Gulf states go back decades, and they are underwritten by an estimated four to five million Pakistanis living in the region. In the last fiscal year those workers sent home an estimated $22 billion, more than half of the record $41.6 billion Pakistan received in remittances from around the world. Saudi Arabia, which hosts the largest Pakistani population in the Gulf, was also the single largest source of inflows at $9.78 billion, followed by the UAE at $8.81 billion. The UAE, Kuwait, Qatar, Oman and Bahrain together account for roughly $12 billion of the annual total. 

The Gulf states are important trade markets as well. In FY25, the most recent year for which full figures are available, Pakistan’s exports to the UAE reached $1.75 billion and two-way trade crossed $10 billion, making the UAE the biggest destination for Pakistani products in the region. Pakistan also depends on these countries for its energy imports. Set against this, Pakistan receives almost no comparable inflow from Iran. Trade with Iran runs heavily in Tehran’s favor: an Iranian official has put Iran’s exports to Pakistan at $2.42 billion in recent figures against just $706 million in imports, a surplus of more than three to one. International sanctions have dampened any prospect of expanding the relationship. 

For more than five months, since the conflict began on February 28, the Gulf has been directly affected. In retaliation for American and Israeli strikes, Iran has attacked American military installations and the civilian infrastructure of the Gulf states. After a temporary pause, it has resumed. Bahrain, Kuwait and the UAE were hit hard in the first phase. Since the Islamabad Memorandum, the Pakistan-brokered agreement signed by Washington and Tehran on June 17, Iran has struck Kuwait and Bahrain directly while sparing the UAE and attacking Saudi Arabia through its proxies. 

Basic defense cooperation agreements can only carry a bilateral relationship so far. 

Umar Karim

Pakistan has been careful in its language throughout, condemning attacks on Iran and on the Arab Gulf states while stopping short of naming the countries responsible. It does not want to be seen taking sides. The one exception has been direct Iranian attacks on Saudi Arabia, which drew sharper condemnation from Pakistani officials and calls for Iran to stop. The defense agreement with Riyadh explains the difference. 

Pakistan’s emergence as a mediator has put this balancing act into sharper relief. But its attempts to present itself as neutral, and to deepen ties with Iran, have not gone down well in some GCC capitals and may unsettle others. 

It is no coincidence that Pakistan’s attempt to roll over UAE deposits held in its central bank failed and it was compelled to return the money. That would have jolted the economy and depleted reserves had Saudi support not covered the gap. Thousands of Pakistanis have reportedly been deported from the UAE. Some of this may reflect residency violations, but the scale suggests a tense phase in the relationship. A downturn with Pakistan’s biggest export market in the region is alarming. 

There has been some movement in relations with Kuwait in recent weeks. Pakistani decision makers should recognize that basic defense cooperation agreements can only carry a bilateral relationship so far. A more vocal stance on Iranian attacks against Kuwait may pay greater political dividends, including the reopening of the visa regime for Pakistani citizens and access to employment. 

Pakistan’s regional diplomacy should not come at the cost of its national interests. Pakistani workers in the Gulf, the money they send home, and the country’s trade with the GCC states are that interest, and they need to be prioritized. 

-Umar Karim is a doctoral researcher at the University of Birmingham. His research focuses on the evolution of Saudi Arabia’s strategic outlook, the Saudi-Iran tussle, conflict in Syria, and the geopolitics of Turkiye, Iran and Pakistan. X: @UmarKarim89