In a major escalation of U.S. engagement in South Asia, President Donald Trump has declared the conclusion of a trade agreement with Pakistan aimed at jointly developing the country’s “massive oil reserves.” The announcement, shared via Trump’s Truth Social post on July 30, 2025, outlines plans to select an American oil company to lead the partnership and even alludes to a possible future in which Pakistan may sell oil to India.
Trump’s post stated: “We have just concluded a deal with the country of Pakistan, whereby Pakistan and the United States will work together on developing their massive oil reserves. We are in the process of choosing the oil company that will lead this partnership. Who knows, maybe they’ll be selling oil to India some day!”.
Foreign media confirmed that this agreement follows recent diplomatic engagement, including talks between Pakistani Foreign Minister Ishaq Dar and U.S. Secretary of State Marco Rubio, which centered on trade expansion and mining cooperation. Analysts noted the deal falls in line with broader U.S. efforts to deepen economic ties with Pakistan.
Under the terms of the agreement, U.S. firms are expected to help Pakistan explore and eventually extract oil from offshore reserves. Pakistan has long claimed significant deposits along its coastline—potentially ranking among the world’s largest—but development has been slow due to technical and financial barriers. Analysts estimate exploration could require up to $5 billion, with total investment for extraction over a decade reaching $25–30 billion.
Experts caution that Pakistan’s declarations of a fourth‑largest global oil find are not yet verified and extraction could take several years. The actual quantity and recoverability of the reserves remain uncertain.
Pakistan’s government publicly welcomed the agreement. Prime Minister Shehbaz Sharif thanked Trump on social media, calling the pact “historic” and expressing hopes for deeper strategic cooperation.
The deal also dovetails with U.S. interest in Pakistan’s mineral wealth—including copper, gold, and lithium—which recent reports highlighted as under‑developed but potentially transformative. Senior U.S. officials, including those from the Department of State, attended investment forums in Islamabad where mineral sector cooperation was discussed.
This announcement comes amid a flurry of trade moves by the Trump administration. On the same day, a 25% tariff on Indian goods was unveiled, along with unspecified penalties tied to India’s import of Russian energy and defense equipment. While New Delhi faces trade pressure, Islamabad appears to benefit from the new White House policy direction.
Analysts suggest the U.S.–Pakistan deal could signal a pivot to energy diplomacy in South Asia, positioning energy security and commercial interests at the forefront of Washington’s regional strategy.
At present, however, key details remain undisclosed: the American company to lead the oil partnership has not been named, the size or location of the reserves has not been independently verified, and no timeline for development has been issued. Pakistan’s embassy has yet to comment on the plan.
Still, the arrangement marks a notable shift in U.S. policy: fostering extremely close energy and investment cooperation with Islamabad while simultaneously applying hardline trade pressure on its nuclear-armed rival, India.
