Iranian President Masoud Pezeshkian landed in Islamabad today — his first overseas trip since the United States and Israel launched strikes on Iran on February 28, and the first Iranian bilateral visit after Pezeshkian and President Donald Trump signed a Pakistan-facilitated initial deal toward ending the conflict.
Pezeshkian’s visit came not as a head of state doing a favor but as one arriving to say thank you to Pakistan for its unswerving diplomacy that saved Iranians from devastation.
The visit takes place in the backdrop of monthslong Pakistani peace effort as Prime Minister Shebaz Sharif and Army Chief Asim Munir led diplomatic initiative to bring the United States and Iran to the negotiating table.
Both Washington and Tehran have commended Islamabad for its steadfast effort through the many precarious phases of the conflict.
The question Pakistanis now ask quietly, in the corridors of power in Islamabad and Rawalpindi and more openly on the streets of the country’s cities and towns is this: what does gratitude actually buy?
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A Mediator Steps Into History
The welcoming billboards went up in Islamabad overnight — giant murals showing Iranian President Masoud Pezeshkian flanked by Pakistan’s President Asif Ali Zardari and Prime Minister Shehbaz Sharif and Interior Minister Mohsin Naqvi by Tuesday morning, Islamabad’s Margalla Road was sealed, its Red Zone locked down, and a high-level motorcade was threading through a city that had quietly but unmistakably become the diplomatic capital of the Middle East crisis.
Pezeshkian’s arrival follows one of the most consequential diplomatic feats in Pakistan’s modern history. Over the past several weeks, Islamabad — backed in the later stage by Qatar — helped broker the Islamabad Memorandum of Understanding, a framework ceasefire that brought the United States and Iran to the negotiating table in Bürgenstock, Switzerland, for the first time in decades.
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That agreement, signed earlier this month after more than 100 days of open war, established the conditions for a 60-day diplomatic process aimed at permanently ending the conflict.
President Pezeshkian said the visit “aims both to express appreciation and to advance implementation of all provisions of the Memorandum in line with international law and Iran’s rights,” the Iranian government said ahead of his departure from Tehran.
The Iranian president praised Pakistani Prime Minister Shehbaz Sharif, Field Marshal Asim Munir, Interior Minister Mohsin Naqvi, and the Pakistani government for what he called instrumental work in bringing the process to fruition.
Pakistan’s Foreign Ministry confirmed that during the visit, “the two sides will review the full spectrum of bilateral relations and explore new avenues to further deepen cooperation across diverse sectors, including trade, energy, border security, people-to-people exchanges, and regional connectivity.”
Senate Chairman Yousaf Raza Gilani, National Assembly Speaker Ayaz Sadiq, and Deputy Prime Minister Ishaq Dar were all scheduled to call on the Iranian leader. It is, by any standard, a remarkable diplomatic moment for a country that rarely receives credit for what it achieves behind closed doors.
What the Deal Actually Unlocks
The Islamabad MOU is not yet a permanent peace agreement. Its most urgent deliverable, however, is already reshaping the global economy.
As part of the emerging framework, the U.S. Treasury Department issued a 60-day general license allowing Iran to produce, transport, and sell crude oil, petrochemicals, and petroleum products through August 21, 2026.
The waiver also permits transactions in U.S. dollars, giving Tehran access to foreign currency and energy revenues for the first time in years. Treasury Secretary Scott Bessent confirmed that Iran has committed to two conditions that matter enormously to the world: free and open transit through the Strait of Hormuz, and access for International Atomic Energy Agency inspectors inside the country.
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“In line with the ongoing productive talks in Switzerland, Iran has committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency inspectors into their country,” Bessent stated publicly. IAEA access is Iran’s clearest gesture of transparency in this entire process — a signal to the international community that Tehran is willing to be watched. The significance of Hormuz cannot be overstated.
Before the February war, roughly a fifth of all seaborne oil trade in the world transited through that narrow waterway. Iran’s closure of the strait sent energy prices surging and triggered rationing across South and East Asia. Its reopening — even partially, even temporarily — was enough to push crude oil prices down by nearly four percent in a single morning when the deal framework was first announced. That is the measurable, immediate value of Pakistan’s mediation.
The toll question also remains on the table. Iran’s suggestion of collecting a transit toll on the Strait of Hormuz was quickly contested by the international community, and rightly so.
The strait is classified under international maritime law as an international waterway. Vessels of all nations are entitled to innocent passage. Any toll mechanism would be legally indefensible and diplomatically catastrophic — and it is one of the harder issues that negotiators in Switzerland must still navigate over the coming weeks.
The Gas Pipeline: Decades of Waiting, a New Opening
For Pakistan, perhaps no outcome of this peace process would be more transformative than the revival of the Iran-Pakistan gas pipeline — the so-called “Peace Pipeline” — a project that has languished in bureaucratic and geopolitical limbo since it was first agreed in 2009.
The pipeline, originally envisioned as a tripartite Iran-Pakistan-India project, was reduced to a bilateral arrangement after India withdrew citing U.S. pressure.
A 25-year contract was signed between Pakistan and Iran to transport gas from Iran’s South Fars gas field all the way to Nawabshah in Sindh — a journey of approximately 1,500 miles. Iran completed its section years ago. Pakistan never built its side, facing an $18 billion penalty threat from Tehran and a flat refusal of sanctions waivers from Washington.
If sanctions are eased as part of a final deal, the pipeline’s construction becomes not just feasible but urgent. Pakistan’s energy demand, according to the World Bank, is expected to rise by 70 percent before 2030.
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A Pakistani-American entrepreneur Mossadq Chughtai recently presented a proposal on how Iran-Pakistan gas pipeline can help resolve Islamabad’s energy shortages permanently and boost its economic development.
“This could become one of the most significant steps undertaken by Pakistan’s establishment leadership—one that has the potential to usher the country into a new era of industrialization, strengthen its economic foundation, and enhance its long-term resilience well into the next century, resulting an impact of more than $70 Trillion for Pakistan over the time period of this agreement,” he recently told Views News Now.
According to “The Mossadaq Economic Initiative,” key considerations for Pakistan should include securing a “non-revocable” waiver from the United States for a minimum term of 50 years to enable “uninterrupted imports of natural” gas from Iran.
“Establishing a robust pricing agreement with Iran that guarantees a stable long-term pricing structure—ideally at $2.25/MMBTU, with a ceiling of $5.00/MMBTU over a period of at least 50 years, should be a critical part”
Chughtai, who is Vice Chairman of KiNRG, an innovative energy company which just acquired a sizable data center construction company in USA to become first one stop shop for data centers and their energy needs in the world, says Islamabad should implement a “disciplined domestic pricing framework that caps consumer and industrial gas prices at no more than 10% above procurement cost of the government.”
Currently, Pakistan imports expensive LNG from Qatar and relies on an energy infrastructure wholly inadequate for its growing population. Iranian gas — cheap, accessible, overland — would be a structural solution to a crisis that has hobbled Pakistani industry and driven up electricity costs for years.
Iran has also historically expressed interest in building a major oil refinery in Gwadar with a production capacity of 400,000 barrels, though that project stalled alongside the pipeline. Easing sanctions opens both doors simultaneously. The pipeline talks will take time — there are technical, financial, and legal dimensions still to be resolved — but the political environment has never been more favorable.
Gwadar Rises as India’s Chabahar Loses Ground
In the meantime, Pakistan has already moved. In April 2026, under SRO 691(I)/2026, Islamabad issued the “Transit of Goods through the Territory of Pakistan Order 2026,” formally designating Gwadar Port as a commercial transit hub for Iran-bound third-party cargo.
The Gwadar-Gabd corridor — approximately 89 kilometers — now offers the shortest direct land route to Iran, cutting transit times from sixteen to eighteen hours down to two or three, and reducing freight costs by an estimated 45 to 55 percent compared to alternative routes. This has a direct competitive impact on India’s position.
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New Delhi has long invested in Iran’s Chabahar Port as a strategic gateway to Central Asia that bypasses Pakistan. Iran’s growing wariness of India’s role — particularly given what observers describe as India’s relatively passive, and at times unhelpful, posture during the conflict — has created a strategic opening. As one regional security analysis put it, Gwadar’s expanded role “directly challenges the strategic rationale behind New Delhi’s long investment in Chabahar.”
India has been effectively sidelined from the Gwadar-led connectivity architecture that is now taking shape. The economic upside for Pakistan is layered. Formal overland trade with Iran, historically stunted by sanctions, can now substitute for the vast informal smuggling economy that has long drained state revenues.
According to the Ministry of Petroleum, by 2024 alone, 2.8 billion litres of smuggled Iranian oil — worth 227 billion rupees in lost government revenue — entered Pakistan through illicit border networks. As sanctions lift and legal trade becomes viable, that shadow economy can be brought into the formal sector, generating tax revenue, creating jobs, and reducing the financing available to criminal and militant networks.
The Security Dividend: Finishing the BLA Question
Pakistan’s mediation role has also unlocked something rarely discussed openly: a new seriousness in Iran-Pakistan security cooperation. The Balochistan Liberation Army has long exploited the Pakistan-Iran border as a sanctuary.
Security analysts and Pakistani officials have for years argued that BLA leadership coordinates cross-border operations from Iranian territory and has received logistical support through Iranian-adjacent networks.
Islamabad has viewed this with deep frustration — and has also pointed to what it characterizes as India’s intelligence services using the porous western frontier as a corridor for proxy operations against the Pakistani state.
The new bilateral warmth gives Pakistan an opportunity it has never had before: to press Iran into genuine joint counter-terrorism cooperation along the 909-kilometre shared border. In a promising early signal, immediately after the May 24 train bombing in Quetta, the Iranian Foreign Ministry publicly condemned the attack — a diplomatic gesture that would have been unthinkable a year ago. Iran, which has itself observed India’s unhelpful posture during this crisis, is now inclined toward greater caution in its regional alignments.
That shift benefits Pakistan. A more cooperative Iran on border security, combined with formal trade channels that erode smuggling networks, would directly reduce the BLA’s operational capacity.
Criminal revenues, including drug trafficking across the frontier, sustain insurgent finances. Formalizing trade cuts off that oxygen.
The Bigger Picture: What Pakistan Has Earned
Pakistan spent decades as the country the world leaned on and rarely rewarded. It absorbed millions of Afghan refugees. It served as the transit route for American wars. It took on the burden of regional instability at significant cost to its own security and economy. And it largely did so without recognition.
This week is different. The Iranian president’s visit to Islamabad — his first overseas trip since the February conflict began — is a moment of symbolic and material significance. Pakistan did what no other country could or would do: it maintained lines to both Washington and Tehran simultaneously, provided a diplomatic framework that preserved Iranian dignity while addressing American security concerns, and helped prevent a war from becoming a catastrophe.
The dividend being negotiated now — cheaper oil, a revived pipeline, Gwadar’s ascent, formalized trade, a calmer border — is not guaranteed. The peace process has 60 days to reach a permanent agreement, and the pitfalls are real. Uranium enrichment, the long-term status of Hormuz, the future of Hezbollah in Lebanon, and the shape of any sanctions relief framework all remain deeply contested.
ut for the first time in a long time, Pakistan sits at a table where it has leverage — not borrowed leverage, not leverage as a favor to a great power — but leverage earned through sincere, sustained diplomacy. That is rarer than it sounds. And Islamabad would be wise to spend it carefully.
Asim Tanveer is a seasoned journalist working for TV and electronic and print media outlets. He has been working for some of the world’s leading news organizations including Associated Press (AP), Reuters, BBC, CNN, CNBC, Star TV, Voice of America and The New York Times for more than 20 years. He has won several awards for his live coverage of events that include a Reuters News Agency World Award and the Pride of Performance award in 2010.
Kiran Asim is a writer who covers the U.S., Europe, South Asia, and the Middle East. Her reports and analyses look at the geostrategic issues and contemporary developments and their economic and political implications. She also writes about society and education.
