History rarely offers neat repetitions, but the Saudi-Pakistan defence pact announced this week bears an uncanny resemblance to another turning point: Britain and France’s humiliation during the Suez Crisis of 1956, when the postwar illusion of European dominance collapsed overnight.

Then, as now, the moment was defined not by a battle lost, but by a trust betrayed. What Suez revealed for London and Paris, Riyadh has just revealed for Washington: that the security guarantees of an old patron are sometimes just not good enough.

The pact follows on the heels of Israel’s strike on Qatar, which laid bare the fragility of American security assurances in the Gulf.

For decades Saudi Arabia was the archetype of an American client state — trading oil for protection, dollars for arms, loyalty for reassurance. That it has now stitched its security fate to Pakistan’s armed forces, and by extension to China’s military-industrial system, marks a dramatic rupture in the fabric of the US-led world order.

The pact is sweeping in scope. A senior Saudi official described it as a “comprehensive defensive agreement that encompasses all military means.”

That phrase, bland as it may sound, carries profound weight — it extends Pakistan’s nuclear deterrence to the kingdom. In effect, Riyadh has acquired a nuclear umbrella, one untethered to American restraint. And because Pakistan rejects a “no first use” doctrine, that umbrella comes with the threat of pre-emptive strike.

The China Factor

The symbolism is extraordinary, but the consequences are starker still. Pakistan imports the overwhelming majority of its weapons from China. Saudi Arabia, by joining hands with Islamabad, is binding itself to Beijing’s defence supply chain.

This alignment also extends the China-Pakistan Economic Corridor, the flagship of Beijing’s Belt and Road Initiative, all the way to the Persian Gulf. For China, the strategic prize is immense: a secure, nuclear-protected energy corridor bypassing the Strait of Malacca, its most vulnerable chokepoint.

For Riyadh, the lesson from the Qatar strike was obvious. It needs to hedge against dependence on Washington before it is too late. Other US-aligned states are surely watching. A cascade of similar realignments could follow, dismantling the architecture of American alliances and replacing it with a patchwork of regional nuclear patrons.

India’s Altered Calculus

For India, the ramifications are doubly fraught. New Delhi depends on Saudi Arabia for a substantial share of its energy imports. It now faces the unsettling reality that its most critical supplier has entered a binding military partnership with its archenemy. Riyadh and Islamabad have an older military pact whereby Pakistani troops are lent to the House of Saud for guard duties.

Does this mean Saudi Arabia would ride to Pakistan’s defence in a future conflict sparked by terrorism or a border clash? Would Riyadh really risk embroiling its soldiers, and by extension its monarchy, in the quicksand of a South Asian war?

Most analysts believe that to be an unlikely scenario. The Saudi war machine is built for projection, not quagmire. A far more plausible scenario is one where Riyadh offers financial lifelines, discounted oil, or arms shipments. The kind of support that, even short of direct intervention, could tilt the regional balance at the margins, but not really affect the battlefield.

Still, the very perception of Saudi backing enhances Pakistan’s confidence, complicating India’s strategic calculus.

The economic dimension is just as unsettling. The Biden administration’s great counterweight to China’s Belt and Road was the India-Middle East-Europe Economic Corridor (IMEC), meant to channel trade and energy across Saudi soil toward Europe.

That vision now lies in tatters. Riyadh’s alignment with Islamabad and Beijing all but guarantees that India’s flagship connectivity project will stall, leaving New Delhi more isolated in its geopolitical contestation with China.

Risk Global Financial Equilibrium 

Then there is the question of the dollar remaining the sole  currency of global business. The Saudi-American bargain of the past half century was rooted in the petrodollar system wherein the world’s oil is priced in dollars, sustained by US military protection.

Saudi Arabia has maintained a fixed exchange rate of 3.75 riyals per US dollar since 1986, creating a cornerstone of monetary and financial stability. A shift away from this regime remains a low-probability but high-impact event, given the economic and geopolitical linkages embedded in the peg.

After the 1973 Arab oil embargo and the ensuing global oil shock, Washington and Riyadh struck a 1974 accord. Saudi oil exports would be priced exclusively in US dollars and surplus revenues recycled into US treasuries. In return, the United States provided military support. This “petro-dollar” arrangement reinforced the dollar’s global supremacy.

By outsourcing its defence to Pakistan and, indirectly, to China, Riyadh has loosened its obligations. Freed from Washington’s security leash, the Saudis can theoretically price oil in whatever currency they choose. The fact is that any disruptions in the riyal-dollar relationship would risk global financial equilibrium and undermine investor trust in the greenback.

Even though Saudi Arabia is unlikely to do so in at least the short term, the very possibility of throwing the riyal-dollar deal out of the window means yet another step toward a world where the dollar is merely one option among many, not the indispensable anchor of global finance and commerce.

Fragmenting World Order

However, it would be premature to write an obituary of American power. The United States retains unmatched global reach, powerful alliances, and the world’s reserve currency. Nevertheless, one has to understand that illusions of dominance die slowly, even though a single event could be a marker for such a fade-out.

For Britain and France, Suez was such a moment. One has to see whether the Saudi-Pakistan pact may be remembered the same way for Washington. The day when the postwar order finally started giving way to a more uncertain multipolar world.

However, the prospect of such a fragmented world akin in many ways to a pre-World War II scenario where no single power was pre-eminent and each major power was trying its best to go in for a land grab across the globe is frightening to say the least.

And that may actually help Washington reinforce its own strategic calculus to shore up its forces and win back its allies before it’s too late in the day.

(The writer is a senior Indian journalist and geopolitical analyst. Views expressed are personal)