In an unexpected geopolitical maneuver, then U.S. President Donald Trump declared a historic oil development and exploration agreement with Pakistan back in July 2025. The agreement, meant to exploit Pakistan's previously untapped oil reserves, has generated a lot of international interest, particularly after Trump also stated that the oil could "even be sold to India someday."
This news has again sparked South Asian energy politics, economic sovereignty, and the future of Pakistan as a likely energy exporter.
What Did Trump Actually Say?
Trump was delivering a speech at an economic summit in Texas on July 29, 2025, when he said:
"We've just signed a huge agreement with Pakistan to develop some of Asia's most promising oil reserves. We may even sell it to India one day—who knows!"
This offhand but influential remark caused a storm of rumor and interpretation around the world's energy markets, media outlets, and political establishments.
⛽ What's in the Deal?
While formal details are still partially under wraps, initial reports indicate:
Granting American oil companies exploration rights in some areas of Balochistan and Sindh.
Investment in drilling, pipeline, and refinery infrastructure of $4–6 billion USD.
A revenue-sharing policy that benefits Pakistan's long-term economic interests.
Involvement of Pakistan Petroleum Ltd. (PPL) and OGDC as local partners.
What It Means for Pakistan's Economy
Pakistan has long been dependent on imported LNG and oil, shelling out billions every year to service energy needs. This agreement may:
Increase foreign reserves through possible exports.
Generate thousands of job opportunities in the infrastructure and oil industry.
Improve rural economies where exploration areas are situated.
Enhance energy security, particularly during summer peak and industry cycles.
Analysts estimate that if properly managed, the deal will reduce Pakistan's energy import bill by 30% over the next 5 years.
International and Regional Response
India
India hasn't officially responded, but most Indian analysts and Twitterers responded vociferously to Trump's "sell it to India" comment, labeling it as "strategically provocative."
China
With China's large stake in the China-Pakistan Economic Corridor (CPEC) and interests in the energy sector in Pakistan, this agreement may present competition or partnership options.
Russia
Russia also has looked at energy partnerships in South Asia, and this U.S.–Pakistan alliance could prompt Russia to step up its efforts to access regional energy markets.
Political Implications
This transaction is also regarded as a foreign policy realignment. The U.S., led by Trump, is increasingly involving Pakistan as a strategic energy ally—something that has not happened on this scale in decades.
It can also: Shape alliances within the region.
Alter OPEC dynamics in case Pakistan becomes a medium-scale exporter.
Instigate other developing nations to tap untapped resources through foreign alliances.
⚠️ Risks & Criticisms
Notwithstanding the optimism, critics have raised genuine concerns:
Concern about transparency in contract terms and environmental protections.
Environmental effects of mass drilling in sensitive areas.
Security risks in Balochistan could interfere with exploration.
Popular perception suspicious of foreign dominance over national assets.
Pakistan's civil society organizations are already calling on the government to publish full contract information and make environmental protections a condition.
0 Comments