Trump reveals US-Pakistan agreement for oil reserve expansion
U.S. and Pakistan Finalize Historic Trade Deal Focused on Oil Reserves
In a significant development, U.S. President Donald Trump announced a landmark trade agreement with Pakistan on Wednesday. This deal, finalized in late July 2025, centers on the joint development of Pakistan's "massive oil reserves" along its coastline, marking a significant step in bilateral economic cooperation.
The agreement was welcomed by Pakistan's Prime Minister Shehbaz Sharif, who thanked President Trump for his leadership in securing the deal. He described it as a landmark that will deepen the longstanding partnership between the two nations.
The U.S.-Pakistan goods trade reached approximately $7.3 billion in 2024, up from $6.9 billion in 2023. This increasing trade volume underscores the growing economic ties that the new deal seeks to enhance. However, the U.S. still has a trade deficit with Pakistan, amounting to $3 billion, showing a 5.2% increase from the prior year.
The focus of the deal is to leverage American expertise and investment to develop Pakistan's oil reserves, potentially reducing Pakistan's reliance on oil imports from the Middle East. The deal includes selecting an oil company to lead this partnership, which could transform Pakistan’s energy sector and improve energy security.
President Trump hinted at a longer-term regional impact, suggesting that the developed oil might even be sold to neighboring countries such as India in the future, indicating a possible shift in regional energy trade dynamics.
Meanwhile, Trump also announced 25% tariffs on goods imported from Japan and South Korea, which will take effect on Aug. 1. Trump is scheduled to meet with South Korean officials to discuss lowering the planned tariff on goods imported into the U.S.
Pakistan's Foreign Minister Ishaq Dar said a trade deal with the U.S. is "very close". Discussions and virtual meetings have been ongoing in Washington, but no timeline for the trade deal with Pakistan was offered by officials in Washington. The U.S. and Pakistan are in the process of choosing the Oil Company to lead this partnership.
This development indicates a strengthening of U.S.-Pakistan economic ties, particularly in the strategic energy sector, which could have significant benefits for Pakistan's oil reserves and broader economic stability.
Sources:
- CNN
- Reuters
- FOX Business
- The New York Times
In the wake of this historic trade deal, concerns about inflation may arise due to potential changes in oil supply and demand within Pakistan's economy. Additionally, the selection of an oil company to lead this partnership may be a subject of political debate, as it could potentially impact general-news discussions regarding future energy trade dynamics in the region.
