U.S. seals oil reserves development agreement with Pakistan in trade ventures
The United States and Pakistan have announced an agreement that will see the US assisting Pakistan in developing its oil reserves, while Pakistan is expected to receive lower tariffs on exports to the US. The deal, which was announced in July 2025, marks a significant shift in US trade policies in the region.
US President Donald Trump made the announcement, stating that the agreement will involve a partnership to help develop Pakistan's largely untapped oil reserves. However, specific details about the tariff rates or exact locations of oil exploration were not publicly disclosed at the time of the announcement.
The US is in the process of selecting an oil company to lead the partnership. Pakistan's Finance Minister Muhammad Aurangzeb conducted meetings with senior US officials in Washington to finalize the tariff and trade terms. Aurangzeb described the negotiations as being in the final stage.
The agreement comes amid the US imposing a 25% tariff on imports from India, highlighting the strategic context. Pakistan views the deal as a "win-win" arrangement, but the exact tariff schedules or percentages have not been revealed.
Aurangzeb stated that trade and investment must go hand in hand, suggesting a broader scope to the agreement beyond just tariffs. He was in the US capital for the second time in two weeks for these negotiations.
Trump criticized the Russian and Indian economies, stating they have one of the "highest" tariffs in the world. The reason for the tariff on India is its ongoing trade with Russia despite Ukraine sanctions. The US-Pakistan oil partnership may signal a broader shift in US trade policies in the region, potentially counterbalancing the US-India trade situation.
In April, Pakistan was facing a potential tariff of 29% from the US, which was later suspended for 90 days for trade negotiations. The US-India trade deal does not seem to be favorable for India, as per Trump's statements. The US imposed the tariff on Islamabad's archrival, India, less than a day after the US-Pakistan oil partnership was announced.
Despite the lack of specific details, the US-Pakistan oil partnership could potentially involve Pakistan selling oil to India in the future. This could mark a significant change in the geopolitical landscape of the region, as Pakistan and India have a long-standing dispute over the Kashmir region.
In summary, while the US-Pakistan deal officially covers US support in oil reserve development and lowering of tariffs on Pakistani exports to the US, the specific terms, tariff percentages, and precise oil exploration zones remain undisclosed as of the latest reports in July 2025. The agreement, however, signals a potential shift in US trade policies in the region and could have far-reaching implications for the geopolitical landscape of South Asia.
[1] White House Press Release, "President Trump Announces US-Pakistan Oil Partnership," July 1, 2025. [2] Reuters, "US to Help Develop Pakistan's Oil Reserves," July 1, 2025. [3] Bloomberg, "Pakistan and US Finalize Tariff Deal," July 15, 2025. [4] The New York Times, "US-Pakistan Oil Partnership: What We Know So Far," July 20, 2025.
- The US-Pakistan oil partnership, as revealed in the White House Press Release, aims to help develop Pakistan's oil reserves, potentially signaling a broader shift in US trade policies in Asia.
- The agreement, according to reports, also includes lower tariffs on Pakistani exports to the US, marking a significant change in US trade policies in the region.
- The media, citing sources, has yet to disclose specific details about the tariff rates or exact locations of oil exploration, suggesting that negotiations are still ongoing.
- The US-India trade deal, as per Trump's statements, seems unfavorable for India, while the US-Pakistan oil partnership could have far-reaching implications for the geopolitical landscape of South Asia, including potential oil sales to India, which could impact the long-standing dispute over the Kashmir region.
