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Sunidhi Sampige
31 December 2025 |
What happened?
Bilateral visits in 2025
Several high-level bilateral meetings in 2025 signalled a revival of Pakistan-Saudi relations. In February, PM Shehbaz Sharif met Saudi Crown Prince Mohammed bin Salman on the sidelines of the Future Investment Initiative (FII) in Riyadh. During their conversation on investment and energy support, Sharif described Riyadh as a "central partner" to Pakistan's economy. In June, PM Sharif made a two-day official visit to Riyadh, where he reviewed all aspects of bilateral relations and enhanced cooperation in trade, investment, and regional security.
In September, Sharif visited Al Yamamah Palace with Deputy PM Ishaq Dar, Finance Minister Muhammad Aurangzeb, and Defence Minister Khawaja Asif. There, Sharif was greeted with a guard of honor, had meetings that resulted in the Strategic Mutual Defense Agreement (SMDA), and was escorted by Saudi Air Force aircraft upon entering the airspace. A high-level Saudi delegation headed by Prince Mansour bin Mohammad Al Saud of the Saudi-Pakistan Joint Business Council arrived in Islamabad in October, continuing the momentum. To map out future cooperation that reflects the "deep friendship" and historic partnership grounded in Islamic solidarity and common interests, the group engaged with Pakistani leadership, senior officials, chambers of commerce, and business leaders.
Defense agreement
The signing of the Strategic Mutual Defence Agreement (SMDA), which formalized a mutual defense clause similar to NATO after decades of unofficial military cooperation, was the main event of the summit in Riyadh in September. In a Strategic Mutual Defense Agreement signed in Riyadh, Saudi Crown Prince Mohammed bin Salman and Prime Minister Shehbaz Sharif promised that any attack on either country would be considered an act of aggression against both. "Any aggression against either country shall be considered an act of aggression against both," according to a key clause that commits both nations to "coordinated response" and "joint deterrence" in times of conflict. Building on "nearly eight decades" of relationships founded on "bonds of brotherhood and Islamic solidarity, shared strategic interests, and close defense cooperation," the Prime Minister's Office emphasized that the agreement aims to "develop aspects of defense cooperation" and "strengthen joint deterrence against any aggression.". Although a senior Saudi official ambiguously stated that it encompasses "all defensive and military means deemed necessary," Pakistani Defence Ministry officials later clarified that it covers "all military capabilities," including potential deployment of Pakistani forces with missile systems, joint air defense networks, satellites, and interceptors.
Increasing economic and energy cooperation
In 2025, economic ties intensified parallel to security gains. In order to relieve import pressure amid Islamabad's crisis, Saudi Arabia and Pakistan signed a USD 1.2 billion deferred oil facility in February 2025, releasing USD 100 million each month. The Saudi delegation to Islamabad in October concentrated on "trade and investment facilitation and collaboration across priority sectors aligned with Saudi Vision 2030 and Pakistan’s economic growth agenda," focusing on mining projects such as the multimillion-dollar Reko Diq copper project in which Riyadh indicated interest in obtaining government stakes. In order to increase inflows into infrastructure, energy, and other areas, Pakistan's Foreign Ministry emphasised support for "enhanced bilateral trade and investment cooperation," utilising Riyadh's state-owned businesses. By guaranteeing oil and liquidity under sanctions or conflict, the defence pact specifically links these streams to security, addressing Pakistan's wartime vulnerabilities in energy security and financial resilience. For Saudi Arabia, Pakistan offers cheap labour absorption and strategic mineral access, while Saudi Arabia’s Vision 2030 diversification aligns with Islamabad's growth needs, creating mutual incentives amid global energy transitions and Pakistan's IMF-constrained finances.
What is the background?
First, growing economic cooperation. Saudi Arabia's investments target Pakistan's critical mining sector as part of Vision 2030 diversification from oil dependency. Manara Minerals negotiated a 10-20 per cent stake in the USD nine billion Reko Diq copper-gold project, potentially worth USD 500 million to USD 1 billion, while Aramco explored petrochemical opportunities by leveraging Pakistan's gas reserves. These follow USD 6 billion in central bank deposits that stabilised the rupee at PKR 285 amid 18 per cent inflation and USD 7 billion in external payments due. Riyadh also guaranteed USD 2 billion toward Pakistan's IMF programme, preventing the deepening of fiscal ties that limit monetary sovereignty.
Second, security cooperation through troops and training. The September Strategic Mutual Defence Agreement committed both nations to treat aggression against one as against both, formalising Pakistani training of 8-10,000 Saudi personnel and rotations of 5,000 troops to the Yemen border against Houthi threats. PM Shehbaz Sharif's March Riyadh pledge revived deployments securing Saudi-Yemen frontiers while granting Riyadh logistics access to Gwadar port, countering Iran and complementing CPEC. Pakistan also provided F-16 maintenance support and joint exercises, enhancing Saudi capabilities post-Afghanistan withdrawal.
Third, mutual diversification beyond traditional partners. Both countries manage their reliance on major powers. Saudi Arabia uses Pakistan as a bridge to access CPEC infrastructure while lowering its reliance on Washington, balancing the US security reset under Trump with China's tech and energy ties. Amid tensions with India, Pakistan positions Riyadh as an alternative to Beijing, leveraging Gulf capital to counter IMF austerity and CPEC debt traps. The agreement combats Iran in the region while integrating Saudi interests into China-Pakistan dynamics, access to Gwadar supports Riyadh's aspirations to become a logistics hub. As a result, Islamabad trades strategic real estate for economic support without upsetting either superpower, creating a triangular hedging strategy that complicates US-Saudi-Israel realignments and India's Gulf outreach.
What does it mean for 2026?
For Saudi Arabia, the pact consolidates a long-running shift from sole reliance on US security guarantees toward a multi-layered hedging strategy that includes Muslim-majority partners and emerging regional architectures. It gives Riyadh political leverage by pairing Pakistan’s military and nuclear capabilities with Saudi financial and energy power, strengthening its ability to deter threats from Israel or Iran while signalling to Washington that the kingdom can diversify its security options without formally breaking from the US-led order.
For Pakistan, the agreement elevates its status from a security consumer in the Gulf to a security provider, expanding its strategic footprint beyond South Asia while locking in critical support on energy and liquidity that eases long-standing wartime vulnerabilities. At the same time, deeper dependence on Saudi oil and finance increases the risk that Islamabad is pulled more directly into Saudi rivalries and regional crises, forcing Pakistan to balance its new role as a Gulf security partner with its need to manage tense relations with India, complex ties with Iran, and expectations from China and Western partners.
