‘Mediator’ Pakistan has little incentive to end the Iran war

It’s a strange story. A country that is riven by internal divisions, from Abbottabad in the north, the tribal areas in the west, and Balochistan on the coast, signs a peace deal to end a war involving the most powerful country in the world and a neighbour with whom it has hardly enjoyed good relations.

The text of the ‘Memorandum of Understanding’ doesn’t mention Pakistan at all. However, there is no doubt that Islamabad played a role in being the public face of the mediation process. In all fairness, that needed strong diplomatic capabilities, even if exercised through a Field Marshal, and has gained Islamabad brownie points with the US as well as its neighbours in West Asia. It also gained Pakistan a lot of hard cash.

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That convoluted mediation process

The mediation process certainly had its ups and downs, and as of now shows signs of severe strain. After a rather lacklustre ‘online’ signing event of the MoU by Prime Minister Shahbaz Sharif, entirely in situ as it were, he has now got the cameras engaged again, as Iran once again closed the Straits of Hormuz in retaliation for Israeli strikes on Lebanon.

Sharif and his Field Marshal, Gen Asim Munir, arrived in Switzerland, once again at the centre of attention. That Iran did not retaliate with strikes on Israel is possibly due more to reports that it is to receive massive funds from Qatar and the UAE, among others. Pakistan naturally, being universally declared an economic basket case, will hardly be expected to contribute. Meanwhile, it gets its butter, if not bread, from elsewhere.

Pakistan does a volte-face?

But suspicions of Pakistan’s role have begun to increase. As it emerged as an upfront mediator, satellite imagery showed Iranian military and civilian aircraft at Nur Khan airbase, including an RC-130 reconnaissance plane, which needs explanation. That led to alarm in Washington, with Senator Lindsey Graham expressing deep unhappiness with Pakistan, observing: “I don’t trust Pakistan, as far as I can throw them.”

Graham also urged Pakistan to clearly respond to US President Donald Trump’s call to join the Abraham Accords, after Pakistan’s Defence Minister Khawaja Muhammad Asif strongly rejected the idea of “going against the country’s fundamental ideologies”. Earlier, the same minister had called Israel a “curse on humanity”, a post which was quickly deleted. That in itself shows with what kind of mindset Pakistan approaches the mediation process. While Netanyahu has much to be blamed for, he can hardly be expected to trust a process in which Islamabad is a semi-guarantor.

Meanwhile, the hard cash

Senator Graham has unfortunately not seen what else Pakistan has gained from the war. For one, while it cries hoarse on the costs of the war, Karachi port is making money hand over fist. The port received over 2,000 ships in the outgoing fiscal year to record its highest ship traffic in eight years, according to Pakistan’s Maritime Affairs Ministry, which credited the surge to better capabilities on the ground. The truth came from the Ship Agents Association, which noted: “Previously, we were not even in the race. Now, due to the Middle East disruption, Pakistan has a unique opportunity as ships are looking for nearby alternatives and Pakistan is the closest.” In sum, if instability continues, Pakistan wins.

It’s not just Karachi. Gwadar has emerged as a transhipment point, a role that it was always meant for but never quite achieved due to Pakistani mismanagement of the required infrastructure to fulfil that role, in terms of highways, terminals, and the sheer efficiency that makes Singapore, for instance, a massive hub.

Even more interestingly, shipping data also indicate a large number of vessels near Port Qasim, with at least 10 container ships expected to arrive between 21–23 June 2026. What was earlier a sleepy port was transformed in 2025, with new berths, additional storage and improved export operations, with cement and clinker exports rising steadily. Key export destinations included Bangladesh, Sri Lanka, Madagascar, the United States and Ghana. For this, full credit has to be given to the minister, Muhammad Junaid Anwar Chaudhry, for cashing in on the neighbouring chaos that was building up.

The smuggling bonanza

But all of that is legal. Then there is the fact that the smuggling of multiple goods, mainly fuel from Iran, has gone up manifold. Reports note that Iran is smuggling at least six million litres of fuel each day to neighbouring Pakistan, according to traders and transporters. Several crossings along the porous 900-kilometre-long border facilitate this, with petrol and diesel loaded onto hundreds of pickup trucks and even motorcycles in canisters before being transported across Pakistan’s vast and impoverished province of Balochistan and beyond.

Iranian fuel is also smuggled by sea in boats to Pakistan’s Gwadar port, and possibly through Jiwani, which could account for the clusters of shipping dhows along the coast. In 2024, Voice of America reported an army official saying that smuggling had come down “from 15-16 million litres per day to 5-6 million litres per day”. A combined intelligence report revealed that about $1 billion worth of fuel being smuggled benefited some 200-plus government and other officials. Now multiply that by at least ten, and consider the kind of money that is being made. Remember that the border is manned by the paramilitary force, the Frontier Corps. Baloch are well aware of this smuggling bonanza. Earlier, massive protests had demanded that border control be given to state authorities. Obviously, that demand was trashed.

The diplomatic semi-boost

Finally, there is the diplomatic boost, but with a twist. As of now, Pakistan has a major presence in West Asian capitals, increased also by the apparent “Strategic Mutual Defence Agreement” signed last year. Under this agreement, any attack against one of the two states is explicitly considered an attack against the other, with the text stipulating that “any attack against either state shall be considered an attack against both states”. A statement by Pakistan’s Khawaja Asif that Riyadh would be covered by Pakistan’s nuclear umbrella has since been deleted. On the ground, Reuters reported the deployment of some 8,000 troops, a squadron of fighter jets and an air defence system.

Meanwhile, the foreign ministry is talking to all major players, with General Munir spearheading the push after his first visit to Iran. Also, don’t forget that Pakistan is helping China continue trade with Iran via Karachi, thus giving the lie to a supposed ‘blockade’. China is not going to forget that and is likely to use it more in the future, as trouble shows no signs of settling down. Pakistan itself has announced six more routes to Iran, all of which is rather staggering. The US ‘War Department’ had nothing to say.

No motivation to end the war

Yet, all this is to the good if the war stops. But eventually, the final solution will require recognition of Israel, and probably troops in Palestine to guard the peace. That will be when Islamabad finds the going tough. Internal opposition is real, though strangled when required by an irate Army Chief who told the Shias to go to Iran if they wanted to. But deployment of troops in Lebanon could be a disaster. That would not just require recognition of Israel, but also persuading the jihadists that this was a good idea. Rawalpindi can do this in a normal situation, since it controls the financial levers. But that is also why it keeps the Afghan border alive. In a crunch, it can easily ratchet that up. Afghanistan has no air force to speak of, and a few dozen bombs should do the trick. Unfortunately, that is also when it will try to engineer a war with India.

Overall, there is no doubt that Pakistan has gained considerable ground due to the Iran war. The trouble is that it also has the capability and the motivation to keep that war going, though probably at a lower intensity. A complete escalation is not in its interest. But closing the Straits is. It won’t take long for others to figure this out. When they do, matters could get ugly, as loans get called in or worse. Again, that’s when Rawalpindi will try to turn this into an opportunity against India. That’s a pity. A real push for good in West Asia could power Pakistan’s growth and give it greater confidence and stability. But that’s rarely how the cookie crumbles.

(Dr Tara Kartha is a former Director, National Security Council. The views expressed in this piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.)