Energy crossroads

ENERGY does not flow freely. It moves through pipelines, ports and political agreements, and when any one of those breaks down, the consequences spread far beyond the country where the disruption began. The 1973 oil embargo, the Iran-Iraq tanker war, the Russia-Ukraine energy crisis: each was a reminder that the global energy system is not just an economic mechanism but a deeply geographic one. Supply routes, transit corridors and chokepoints are not background detail. They determine who has leverage and who does not.

Pakistan sits at one of those crossroads. Positioned along the Arabian Sea at the intersection of the Middle East, Central Asia and South Asia, it links regions that account for a significant share of global energy production and consumption. That is the kind of positioning countries spend decades trying to engineer. Pakistan has it by default and has spent decades failing to use it.

Three projects were meant to change that: TAPI, the Iran-Pakistan pipeline and Gwadar Port. All three were serious attempts to turn location into leverage. All three remain unfinished.

TAPI was conceived in the 1990s to carry up to 33 billion cubic meters of gas annually. Pakistan stood to earn transit fees from Indian offtake of $700 million to $800m a year, which could have changed Pakistan’s position from merely an energy-consuming state to one that makes income from energy.

Turkmenistan completed its section in 2024 but India’s participation is uncertain as they have never been comfortable with the idea that Pakistan could, in a crisis, simply turn off the tap. Without India the economics fall apart, and for years critics pointed to another problem: at around $7.5 per MMBtu, TAPI gas was more expensive than LNG when global prices were low.

That was a reasonable objection in calmer times. Then the Strait of Hormuz closed. LNG prices spiked and countries that had built their energy strategy around seaborne supply found themselves exposed. Pakistan was among them. Energy security is not about what is cheapest when everything is running smoothly. It is about what still flows when it is not. TAPI is overland.

The Iran-Pakistan pipeline is the one that stings most. Proposed in 1994, it has been in discussion and delay for three decades. Iran completed its section. The gas is there. Had Pakistan done the same, it would not be where it is today. Its thermal power plants starved of fuel, its circular debt spiralling, its cities rationing electricity by the hour. Instead, American sanctions froze the project. Pakistan never built its section. Iran initiated arbitration seeking $18bn in damages but the response here has not been to revive the project but to seek an out-of-court settlement to scrap it, while simultaneously asking Iran for another 10 years to decide.

The location is there. The follow-through is not.

Similarly, Gwadar Port could have been transformative. Its potential as a deep-water port was identified in 1954 and construction only began in 2002, half a century later. Conceived as a gateway connecting China and Central Asia to the Arabian Sea, it offered Pakistan a chance to become a genuine land corridor. Infrastructure gaps and insecurity in Balochistan have kept that potential on paper.

The pattern is hard to ignore. The location is there. The follow-through is not.

These failures are not purely domestic. Sanctions, instability and external pressure have all played a role. But Pakistan finds itself at the centre of multiple energy corridors while remaining peripheral to the decisions that shape them, and that is not entirely someone else’s fault.

The recent ce­­asefire, led by Pakistan, if it holds and mat­ures into something lasting, is the perfect opportunity to correct course. On the IP project, any relaxation of sanctions on Iran’s energy sector is a green signal for Pakistan to finally develop its side.

TAPI is a more complicated discussion involving three other states, but the transit fee amounts alone are a carrot for Afghanistan to get its act together, and the energy security argument should now be compelling enough for India, given what the closing of the strait did to LNG markets. The recent crisis was a wake-up call. You cannot have too much energy security, and Pakistan should be pursuing both.

Gwadar is ever more important. Karachi handled record port traffic during this crisis. Had Gwadar been developed to its potential, Pakistan could have absorbed far more. More importantly, the gateways into China and Central Asia need to be developed, operational and secure. Recent history has taught us why. Pakistan, given its geography, can ensure this. The question is whether it has the political will to follow through.

The writer is a corporate lawyer working in the upstream oil and gas sector across the Middle East and Pakistan.

Published in Dawn, April 11th, 2026

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