U.S. and Pakistan Strike Trade Deal to Develop “Massive” Oil Reserves
In a significant shift in U.S. policy toward Pakistan, former U.S. President Donald Trump announced on Truth Social that a new trade agreement has been finalized to jointly explore and develop what he called Pakistan’s “massive oil reserves.” He added with a touch of taunting humor: “Who knows, maybe they’ll be selling oil to India someday!
🔍 Deal Highlights & Strategic Context
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The agreement involves selecting a U.S. oil company to manage exploration activities in Pakistan.
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It marks part of broader negotiations covering trade, critical minerals, and bilateral investment opportunities. Pakistan’s Finance Ministry emphasized the deal may include reciprocal tariff reductions, particularly benefiting exports to the U.S.
🛢️ Validity of “Massive” Oil Claims
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Experts caution that Pakistan’s proven oil reserves remain modest, estimated at 234–353 million barrels—about 0.02% of global reserves—which could meet domestic demand for less than two years without imports. Previous claims of major offshore and shale discoveries have largely remained unverified or speculative, as substantive drilling has not yet confirmed commercial viability.
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Potential sites are believed to lie in Balochistan, Sindh, Punjab, and Khyber Pakhtunkhwa, though security risks—especially in insurgency-hit Balochistan—persist.
💼 Investment & Regional Implications
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Energy sector analysts estimate that $5 billion and up to five years may be needed to bring offshore fields to production.
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Security concerns and political instability have historically deterred major oil companies from investing in Pakistan. The deal also has political undertones, appearing as a strategic U.S. pivot to Pakistan amid broader geopolitical positioning in South Asia.
📦 Early Signs of Cooperation
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Pakistan’s largest refiner, Cnergyico, has signed a deal to import 1 million barrels of U.S. West Texas Intermediate (WTI) crude oil through trading partner Vitol, marking the country’s first-ever U.S. oil shipment—expected to arrive in Karachi in October.
🧭 Final Thoughts: Grand Vision or Political Gesture?
While the deal signals growing diplomatic and commercial ties between Washington and Islamabad, experts urge caution given Pakistan’s currently limited proven reserves, unresolved security issues, and past disappointments in exploration efforts. The reality of transforming Pakistan into a major oil exporter—let alone becoming a supplier to India—remains speculative at best.
