What Pakistan actually earned from the Islamabad Memorandum – and what it paid
In April 2026, Pakistan was doing three things at once.
It was hosting the first direct US–Iran talks in decades, a twenty-one-hour negotiation at the Islamabad Serena Hotel between a three-hundred-strong American delegation led by Vice President JD Vance and a seventy-member Iranian team under parliamentary speaker Mohammad Bagher Ghalibaf.
It was deploying a squadron of sixteen JF-17 fighters to Saudi Arabia — Saudi-financed, Pakistani-crewed — as part of a force that would grow to eight thousand troops, two squadrons of drones and a Chinese HQ-9 air defence battery, all directed at deterring the country it was mediating for.
And, according to a senior US official who spoke to CBS News, it was sheltering Iranian military aircraft on its own territory to shield them from American strikes.
This is the part of the Pakistan story that the celebratory coverage skipped. Islamabad was not a neutral party who happened to be trusted by both sides. It was a state running an arbitrage operation across three sets of patrons, and the Islamabad Memorandum of Understanding was the product it sold.
The question worth asking is not whether Pakistan deserved the credit it received. It is what it was paid, by whom, and whether the payment ever arrived.
The price of admission was paid in advance
The most persistent misconception about Pakistan’s mediation is that Washington rewarded it afterwards. The sequence runs the other way. Pakistan bought its access to the Trump administration months before the war began, and that purchased access is precisely what made it usable as a mediator.
The instruments were crypto and minerals.
In September 2025, US Strategic Metals signed a critical-minerals memorandum with the Frontier Works Organisation — the Pakistan Army’s own engineering and construction arm — with a reported commitment of $500 million. Later that month, Prime Minister Shehbaz Sharif and Field Marshal Asim Munir were received at the Oval Office. Munir brought a wooden box of rare-earth samples. In January 2026, Pakistan accepted a seat on the US-sponsored Board of Peace for Gaza.
Also in January 2026, Finance Minister Muhammad Aurangzeb signed an agreement in Islamabad with Zach Witkoff of World Liberty Financial, the crypto venture co-founded by the President’s family, with Munir and Sharif in the room. The chairman of Pakistan’s new virtual assets regulator, Bilal bin Saqib, had himself been named an adviser to World Liberty Financial the previous April, leaving that role when he entered government. The White House has said there were no conflicts of interest. Bin Saqib, the regulator and the Finance Ministry did not respond to Al Jazeera’s requests for comment.
That agreement was signed weeks before the US and Israel struck Iran on 28 February.
The tariff picture tells the same story. The nineteen percent rate applied to Pakistani goods is the lowest of any South Asian country — lower than India’s, a state Washington had spent two decades cultivating as its preferred regional partner.
So when the war came and the Trump administration found itself unable to trust any available intermediary, the channel to Islamabad already existed, warmed by eighteen months of transactional diplomacy that Munir had personally curated. Vance would later joke in Switzerland that he had two very important people in his life, an Indian and a Pakistani — his wife and Field Marshal Munir.
Pakistan’s reward for mediation, in other words, is largely indistinguishable from the relationship it had already bought. Chatham House put the point more carefully than Islamabad’s press would like: it is too early to tell whether the mediation will produce tangible US benefits, and the historical record offers little basis for optimism. The Special Investment Facilitation Council, created in 2023 with Munir installed alongside the prime minister, opened with hopes of attracting $25 billion. It has fallen far short.
There is no documented mediation fee. There is no cash transfer, no oil quota, no debt write-off. What exists is a set of pre-existing arrangements now described retroactively as a peace dividend.
What Tehran had to offer
Iran’s position was simpler: it had nothing bankable to give, and it did not pretend otherwise.
President Masoud Pezeshkian arrived in Islamabad on 23 June for a day-long state visit — his first foreign trip since the February attacks, and universally read as an expression of gratitude. He had made the same gesture after the twelve-day war of June 2025, when Pakistan was again his first destination and twelve bilateral agreements were signed, along with a pledge to raise annual trade from roughly $3 billion to $10 billion.
That $10 billion target is now cited routinely as a fruit of the mediation. It predates it by ten months.
The day after Pezeshkian left, Pakistan’s foreign office spokesperson said plainly that progress on economic projects with Iran depends on the pace of sanctions relief. Asked about the Iran–Pakistan gas pipeline — the single project that would genuinely alter Pakistan’s energy arithmetic, potentially displacing expensive LNG — he said he was not aware whether it had even come up in the talks.
This is the shape of Iran’s payment: a state visit, warm language about cooperation in all fields, and a set of commercial prospects whose realisation is entirely contingent on decisions made in Washington. Tehran paid Pakistan in a photo-op and a promissory note drawn on a bank it does not control.
The bill
Against these prospective gains sits a cost that was neither prospective nor small.
When Pakistan hosted the Islamabad talks, the United Arab Emirates pulled a $3 billion loan. Riyadh stepped in with a financial lifeline to cover the hole.
That single transaction is the most honest summary of Pakistan’s position available. Its mediation had an immediate, quantifiable price, and the price was paid by one Gulf creditor and covered by another. Islamabad’s diplomatic independence was underwritten, in cash, by Saudi Arabia.
The running costs were worse. Pakistan imports between eighty-five and ninety percent of its crude from Saudi Arabia and the UAE, and almost all of its liquefied natural gas from the UAE and Qatar. As the war closed the Strait of Hormuz, the fuel import bill rose from $300 million to $800 million.
It is worth resisting the easy narrative of a collapsing economy here, because the numbers do not support it and your readers will check. Pakistan recorded GDP growth of 3.7 percent over the past financial year, its fastest in four years, with remittances up 8.2 percent to $30.3 billion and the fiscal deficit narrowing sharply. The structural problems — the IMF dependency, the circular debt, the thin reserves — are real and unresolved. But the country was not desperate. It was leveraged, which is a different condition and a more dangerous one, because leverage rewards exactly the kind of risk-taking that mediation represented.
The regional ledger
Saudi Arabia was the guarantor and the contradiction. The Strategic Mutual Defence Agreement, signed in Riyadh on 17 September 2025 by Mohammed bin Salman and Sharif, followed the Israeli strike on a Hamas delegation in Doha — an event that persuaded Gulf capitals that American security guarantees would not restrain Israeli operations on their soil. When Iranian missiles and drones hit Gulf targets in 2026, Riyadh invoked it.
Reuters, citing three security officials and two government sources, reported the resulting deployment: eight thousand troops, sixteen JF-17s, drones and an HQ-9 battery, financed by Saudi Arabia and operated by Pakistanis, with the fighter squadron arriving in early April. The agreement reportedly left open the possibility of deploying eighty thousand. The Saudi defence ministry announced the arrival of Pakistani forces at King Abdulaziz Air Base in the Eastern Sector.
Qatar was a genuine co-mediator rather than a supporting player, a fact Islamabad’s messaging consistently understates. The Bürgenstock round in Switzerland was mediated by Pakistan and Qatar jointly. On 11 June, it was Qatari mediators meeting Iranian officials in Tehran, coordinating with Washington, who narrowed the decisive gaps on frozen assets, the reopening of Hormuz, and nuclear protocols during the ceasefire. The breakthrough that produced the memorandum was substantially Doha’s work.
The UAE was the dissenter, and the only Gulf state to impose a cost on Pakistan for its choices.
Turkey joined the four-way foreign ministers’ meeting on 29 March alongside Pakistan, Saudi Arabia and Egypt. Reports in January that Ankara would join the Saudi–Pakistan defence pact were denied, and the agreement remained bilateral — until August 2026, when Turkey reportedly entered a trilateral arrangement with Riyadh and Islamabad under the Mecca Joint Defence Agreement. That development is days old at the time of writing and deserves independent verification before it is built upon.
Egypt completed the regional cover. As the King Faisal Center’s Umer Karim observed, Pakistan filled a vacuum created by Washington’s distrust of every other candidate, while coordinating with Egypt, Turkey and Saudi Arabia — bringing the major regional players on board behind a process it fronted.
Beijing’s hand
China’s role has been overstated by Pakistan’s critics and understated by its friends. The documentary record supports a specific reading: sustained, public, high-level encouragement, tied at every point to Chinese commercial interests, without operational control.
Wang Yi called Ishaq Dar on 12 May and urged Pakistan to intensify its mediation, specifically on reopening the Strait of Hormuz. Meeting Dar in New York later that month, he called Pakistan a trustworthy and qualified mediator and pledged continued Chinese support. On 16 July in Shanghai, with the memorandum unravelling, the two coordinated positions on Iran — and in the same readout reaffirmed CPEC 2.0 and cooperation across trade, investment, technology, the digital economy and artificial intelligence. Wang described the memorandum as hard-won and stressed that it was not only a bilateral outcome but the product of international effort, with Pakistan playing an indispensable coordinating role. There is a joint Pakistan–China five-point regional peace initiative running in parallel with Xi Jinping’s own four-point proposal.
The Middle East Forum’s framing is the sharpest available: Beijing played a behind-the-scenes role while allowing Pakistan to remain the visible interlocutor, positioning it as the principal intermediary while shaping the broader agenda from the background.
Beijing’s interests here are not obscure. It buys Iranian oil. It has sunk enormous sums into CPEC, which runs through the Balochistan the war threatened to destabilise. And a fully Western-aligned Iran would leave its closest regional partner strategically isolated. Managed de-escalation, brokered by a client and blessed by Beijing, served every one of those interests without China having to expend a diplomatic asset of its own.
But this is alignment of interests and amplification, not command and control. Pakistan’s actual leverage rested on things China did not supply: the Munir–Trump channel, the Saudi defence pact, and nine hundred kilometres of shared border with Iran. The claim that Pakistan acted purely as a Chinese proxy overstates the evidence, and anyone making it should expect to be asked for a document they do not have.
The information war: what is documented, and what is not
There is a further dimension to Pakistan’s involvement that has received almost no serious scrutiny, and it deserves to be set out carefully — including the parts that remain unproven.
What is documented. Pakistan-based inauthentic networks pushing content around the Iran war exist, and platforms have acted against them. In March 2026, X’s head of product Nikita Bier disclosed that the platform had dismantled a network run from Pakistan: a single operator managing thirty-one hijacked accounts, all renamed on 27 February — the day before the war began — to variants of “Iran War Monitor,” pushing AI-generated war footage. The Bureau of Investigative Journalism separately traced a Pakistan-based operation earning thousands of pounds from Facebook pages pushing inflammatory content at British audiences, monetised through Meta’s advertising system.
What is documented, and damning, but separate. Pakistan’s military demonstrably runs a covert domestic astroturfing programme. Drop Site News reported in 2024 on the Army Agahi Network, in which military field officers are directed to create fake social media accounts, propagate pro-military messaging, and level defamatory accusations and threats against army critics, members of the judiciary and civil society, and supporters of Imran Khan’s PTI. The capability is not in question. The institutional willingness to use it is not in question. What is absent is any evidence that it has been pointed at Iran-related content.
What is documented, and cuts the other way. The one case where Pakistani bot infrastructure has been forensically traced in an Iranian context involves Pakistan as vendor, not principal. The digital forensics group Qurium traced more than a million bots harassing Iranian feminist activists to commercially sold follower packages originating with two social media marketing firms operating out of Punjab. Those firms sell to anyone. The actor is whoever bought.
What is asserted but not established. Benjamin Netanyahu told CBS’s 60 Minutes that several countries had manipulated social media with bot farms and fabricated American personas to erode US sympathy for Israel, describing content that traces back to a basement in Pakistan. No forensic backing for the specific attribution has been published, and the source is an interested party in the conflict.
The inference, stated as an inference. Put those pieces together and a reasonable person can arrive at the conclusion that Pakistan’s pro-regime online amplification during this war was directed rather than organic — that a state with a demonstrated, institutionalised astroturfing capability, actively mediating on behalf of Tehran, deploying assets on both sides of a conflict, and sheltering Iranian aircraft while claiming neutrality, did not leave its information apparatus idle. The circumstantial case is not trivial. The timing of the account renamings, the day before the strikes, is not obviously commercial.
But it remains an inference. There is, as of this writing, no platform takedown attributing an Iran-facing influence operation to a Pakistani state entity. Until there is, the honest formulation is that Pakistan supplied the infrastructure and Iran supplied the demand — and that the state-sponsorship question is open rather than settled.
That distinction matters, and not only for accuracy. Iran’s own state information operation is documented to a standard Pakistan’s is not. The Institute for Strategic Dialogue’s Axis of Amplification traced the response to the protests that began in December 2025 — met with mass killings, mass arrests, and a digital blackout from early January — across regime media, proxies and a network of Western supporters, including figures whose content Press TV amplified. That is the proven operation. Conflating it with an unproven one weakens both.
What Pakistan is left holding
The memorandum was signed electronically on 17 June — Trump in France at the G7, Pezeshkian in Tehran, Sharif in Islamabad as endorser. Fourteen points. A sixty-day window. Twelve billion dollars in frozen Iranian funds released, and a temporary sanctions easing permitting Iranian oil and petrochemical sales through 21 August.
By 8 July, Trump was describing the deal as over. Pakistan’s foreign ministry urged all sides to honour their commitments and called the memorandum an enduring foundation, which is the language states use when the thing they built is coming apart and they need it to have meant something.
The sanctions easing expires this week. Whatever Pakistan hoped to convert — the pipeline, the trade target, the border economic zones, the transit revenue through Gwadar — was always downstream of sanctions relief that has not arrived and now may not.
What Islamabad has banked is real but non-monetary: it moved from being described by an American president as a purveyor of lies and deceit to being publicly credited by that president’s vice president as an indispensable statesman’s country. That is a genuine reversal, and it was accomplished by a general with no diplomatic portfolio and a prime minister with a weak domestic mandate.
What it has not banked is anything that services debt.
And the position it built to get there — mediator to Tehran, garrison to Riyadh, supplier to Washington, client to Beijing — is not a stable equilibrium. It is a set of commitments that only cohere while the fighting is paused. The fighting has resumed. Senator Lindsey Graham has called for a complete reevaluation of Pakistan’s role as mediator. The Saudi pact reportedly contemplates a tenfold expansion of the deployment. Every one of Pakistan’s four patrons now has a claim on it, and no two of those claims point in the same direction.
Middle powers punch above their weight by being useful to everyone. The method works until the parties stop tolerating one another’s broker.
Sources
- Islamabad Memorandum and Islamabad Talks — Wikipedia; full MoU text via Middle East Outlook; Wikisource
- Al Jazeera: What does Pakistan stand to gain from helping broker the US-Iran deal? (24 June 2026); Why Iran’s President Pezeshkian is heading to Pakistan (23 June 2026); $500m for Trump, access for Pakistan (3 July 2026); Mediator Pakistan says renewed US-Iran conflict is ‘in no one’s interest’ (9 July 2026)
- Chatham House: What does Pakistan gain from its Iran–US diplomacy? (April 2026)
- The Conversation: How Pakistan became the primary mediator between the US and Iran
- CSIS: Minerals Diplomacy Meets Market Reality: The Case of Pakistan (April 2026)
- ORF: The White House-Pindi Tango
- Reuters via Middle East Eye / Washington Examiner / Jerusalem Post: Pakistani deployment to Saudi Arabia (18 May 2026)
- Drop Site News: leaked Saudi–Pakistan mutual defence pact (April 2026); Secret Pakistani Program Directs Military Officers to Attack Social Media Critics (2024)
- Military.com / CBS News: Pakistan sheltered Iranian warplanes (May 2026)
- Arab News: Pakistan says progress on economic projects with Iran hinges on sanctions relief (24 June 2026)
- Express Tribune: Peace process shifts into action mode; Can Pakistan’s peacekeeping role in Iran war give it an economic dividend?
- Xinhua / Chinese MFA readouts via GlobalSecurity.org (12 May, 29 May, 16–17 July 2026); Geo.tv; Aaj English
- Middle East Forum: Did Pakistan’s Mediation with Iran Serve China’s Interests over America’s?
- Forbes: How Pakistan Turned Rare Access Into Diplomatic Currency
- WION: Pakistan social media bot farms (May 2026), reporting Nikita Bier and Bureau of Investigative Journalism findings
- Qurium / Rest of World: Pakistani marketing firms and bot harassment of Iranian activists
- Institute for Strategic Dialogue: Axis of amplification: Regime media, proxies and Western supporters respond to Iranian protests
- Arms Control Association: Assessing the Islamabad MOU and the U.S.-Iran Nuclear Negotiations
A version of this was first published on X on 15 August 2026. Read the original.