Pakistan's latest announcement about Saudi Arabia's investment in an oil refinery at the strategic port of Gwadar has set alarm bells ringing in India.
James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies at Singapore's Nanyang Technological University, says that Saudi' oil refinery in Gwadar Port could threaten Iran's India-backed Chabahar Port.
The deal could additionally involve deferred payments on Saudi oil supplies which will firstly, create a strategic oil reserve close to Iran, and secondly, help cash-strapped Pakistan in payments, Dorsey said.
Gwadar Port was built mainly by Chinese assistance. It is now operated by the Chinese.
A refinery and strategic oil reserve in Gwadar would serve Saudi Arabia's goal of preventing Chabahar, the Indian-backed Iranian port, from emerging as a powerful Arabian Sea hub at a time that the United States is imposing sanctions designed to choke off Iranian oil exports, Dorsey said adding:
A Saudi think tank, the International Institute for Iranian Studies, previously known as the Arabian Gulf Centre for Iranian Studies (AGCIS) that is believed to be backed by Saudi Crown Prince Mohammed bin Salman, argued last year in a study that Chabahar posed "a direct threat to the Arab Gulf states" that called for "immediate counter meaures."
Written by Mohammed Hassan Husseinbor, an Iranian political researcher of Baloch origin, the study warned that Chabahar would enable Iran to increase its oil market share in India at the expense of Saudi Arabia, raise foreign investment in the Islamic republic, increase government revenues, and allow Iran to project power in the Gulf and the Indian Ocean.
Husseinbor suggested that Saudi support for a low-level Baloch insurgency in Iran could serve as a countermeasure. "Saudis could persuade Pakistan to soften its opposition to any potential Saudi support for the Iranian Baluch" The Arab-Baluch alliance is deeply rooted in the history of the Gulf region and their opposition to Persian domination," Husseinbor said.
Noting the vast expanses of Iran's Sistan and Baluchestan Province, Husseinbor went on to say that "it would be a formidable challenge, if not impossible, for the Iranian government to protect such long distances and secure Chabahar in the face of widespread Baluch opposition, particularly if this opposition is supported by Iran's regional adversaries and world powers."
Saudi militants reported at the time the study was published that funds from the kingdom were flowing into anti-Shiite, anti-Iranian Sunni Muslim ultra-conservative madrassas or religious seminaries in Balochistan.
Dorsey recalled that President Donald J. Trump's national security advisor, John Bolton, last year before assuming office, drafted at the request of Trump's then strategic advisor, Steve Bannon, a plan that envisioned US support "for the democratic Iranian opposition," including in Balochistan and Iran's Sistan and Balochistan province.
China building military base in Pakistan
In another development, China is reportedly constructing a military base in Pakistan's port of Jiwani, close to the Iranian border on the Gulf of Oman.
The Jiwani base, a joint naval and air facility for Chinese forces, is located a short distance up the coast from the Chinese-built commercial port facility at Gwadar, Pakistan.
The Chinese have asked the Pakistanis to undertake a major upgrade of Jiwani airport so the facility will be able to handle large Chinese military aircraft.
Jiwani will be China's second major overseas military base. In August, the PLA opened its first foreign base in Djibouti, a small African nation on the Horn of Africa.