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US-Pakistan Trade Pact Unlocks Oil Potential

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The United States and Pakistan have finalized a pivotal trade agreement designed to unlock Pakistan’s largely untapped oil reserves while lowering tariffs for Pakistani exports to the US, according to senior officials from both nations. This breakthrough is expected to mark a turning point in the economic relationship between Washington and Islamabad, and could drive substantial investment and market access for Pakistan’s key industries.
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Although specific locations for oil exploration have not been confirmed, industry analysts believe the focus will be on Balochistan—a southwestern province known for its vast natural resources and history of unrest. Baloch separatist groups have consistently opposed both domestic and foreign resource extraction, claiming exploitation by the central government, and have targeted security forces as well as foreign nationals involved in major projects.
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President Donald Trump announced the deal via his Truth Social account, stating that the US and Pakistan would jointly work to develop the country’s “massive oil reserves” and that the process to select a lead American oil company is underway. Trump even suggested that Pakistani oil could one day be exported to India, highlighting the broader regional significance of the agreement.
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Trade figures underscore the strengthening partnership: US-Pakistan trade reached an estimated $7.3 billion in 2024, with US exports up 4.4% and imports from Pakistan rising by 4.9% from the previous year. The agreement is projected to further increase bilateral trade, spur US investment in Pakistani infrastructure, and foster greater cooperation on development projects.
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Pakistan’s Prime Minister Shehbaz Sharif celebrated the “long-awaited” deal and thanked President Trump for his crucial role in reaching consensus. The Finance Ministry emphasized that the agreement is set to boost market access, attract investment, and strengthen economic cooperation, particularly with reduced reciprocal tariffs on Pakistani exports to the US. Officials highlighted that the negotiations, which began after Trump’s mediation in easing recent tensions with India, culminated in Washington meetings involving key leaders from both countries.
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