WASHINGTON: The United States might not stop economic assistance to Pakistan over the Iran gas pipeline but the project would seriously strain relations between the two countries, diplomatic sources told Dawn.

“The project will create lot of bitterness towards Pakistan, which Pakistan does not need,” said one source, noting Osama bin Laden’s discovery in Abbottabad had already tarnished Islamabad’s image in the United States.

“The worry about Iran’s nuclear programme is real enough --- and the perception that Pakistan may be helping them to make more money to evade international sanctions will further damage Pakistan’s stock here,” the source said.

Another source said that there could be one redeeming factor for Pakistan, the pipeline extending to India. “The two countries will have enough weight to withstand the criticism but this seems unlikely in the near future,” the source added.

Meanwhile, in a new report on Pakistan’s energy crisis, scholar Michael Kugelman notes that the US private sector also contributes to Pakistan’s energy sector, “including in overtly political ways”.

In his report for the Washington-based National Bureau of Asian Research, the author says that last summer, a US energy firm ConocoPhillips mediated talks between Pakistan and Qatar on a potential natural gas deal in an effort to discourage Islamabad from pursuing a pipeline project with Iran, the report added.

The Obama administration identifies energy as a priority area in its civilian assistance programme to the country, and Congress released nearly $300 million in new energy aid last summer alone.

But Mr Kugelman said given that the extent of Pakistan’s energy woes far exceeded the value of Washington’s $1.5 billion in total annual civil assistance “it is folly to expect US energy aid to make a major dent in the crisis”.

The author notes that Pakistan’s circular debt is now at its highest point of nearly $4.5 billion.