US, Pakistan Sign Oil Deal for Energy Cooperation

Washington, July 31: The United States has reached an agreement with Pakistan to jointly explore and develop the South Asian country’s oil reserves, President Donald Trump announced Wednesday on his social media platform, Truth Social.

While exact details of the partnership remain undisclosed, the announcement marks a significant shift in US-Pakistan economic cooperation, with energy at the center of the deal.

“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,” Trump stated.

He added that the process of selecting the lead oil company is underway. "Who knows, maybe they’ll be selling oil to India some day!" he remarked in a pointed reference to recent tensions with New Delhi.

Strategic Energy Partnership

Pakistan has long claimed untapped oil potential along its coast and inland regions, but this deal marks the first major step by a global power to explore those reserves commercially.

Finance Minister Muhammad Aurangzeb is currently in Washington to finalize the terms of the agreement and other related trade discussions. While the Pakistani delegation has remained tight-lipped about specific tariff arrangements, the timing suggests the oil agreement is linked to broader trade talks.

“We hope to conclude a mutually beneficial trade agreement… hopefully in days, not in weeks,” said Foreign Minister Ishaq Dar earlier this week during a Washington event.

Tariff Talks Continue

The agreement comes amid high global trade tensions. Just hours before announcing the deal with Pakistan, Trump imposed a 25% tariff on Indian imports, citing India’s purchase of oil and arms from Russia. The penalty includes what Trump described as “secondary tariffs” — a new form of trade punishment for countries doing business with embargoed nations.

Meanwhile, Pakistan is pushing to avoid similar penalties by proposing increased imports of US goods to help balance its $3 billion trade deficit with America.

Pakistani officials have expressed hope for a tariff structure comparable to recent US trade deals with countries like Japan, Vietnam, and Indonesia, where rates fall between 15% and 20%.

India Under Pressure

In a parallel move, six Indian firms were sanctioned by the US State Department for purchasing Iranian oil and petrochemical products. The firms include Alchemical Solutions, Ramniklal, and Jupiter Dye Chem, among others — with combined purchases worth hundreds of millions of dollars.

These actions have sent a ripple through Indian markets. The Indian rupee dropped 0.4% in offshore trading, while stock futures also took a hit.

The Indian government has acknowledged the pressure but said it remains committed to negotiating a fair bilateral trade agreement with the US.

Quick Reference: US–Pakistan Oil Deal at a Glance