On July 30–31, 2025, in a flurry of trade-related announcements, U.S. President Donald Trump revealed a landmark energy partnership with Pakistan—just hours after unveiling sweeping tariffs on India.
The Deal
Trump declared via Truth Social:
“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.”
“We are in the process of choosing the Oil Company that will lead this Partnership. Who knows, maybe they’ll be selling Oil to India some day!”.
While the details remain sketchy, media sources describe the agreement as an early-stage collaboration to jointly tap Pakistan’s “massive” oil reserves, with selection of a lead oil company still pending.
Timing and Broader Context
- This announcement came shortly after Trump imposed a 25% tariff on Indian imports and suggested additional penalties over India’s purchase of Russian energy and military goods.
- Trump simultaneously noted active trade talks with multiple countries, including meeting a South Korean delegation to discuss tariff reduction offers.
Strategic Implications
- Energy diplomacy: The U.S.–Pakistan oil collaboration signals a pivot in U.S. strategy to secure new energy sources and deepen ties with Islamabad, contrasting with its increasingly punitive posture toward India.
- Regional realignment: Trump floated the possibility of Pakistan exporting oil to India one day—introducing a narrative of stabilization and interconnected trade in South Asia.
- Economic leverage: With India under looming tariff pressure, the U.S. appears to be preparing alternative energy routes while pressuring New Delhi to change trade practices.
What’s Next?
- Trump said that a “full report” and further details will be shared “at the appropriate time”.
- The White House has yet to name the company that will lead the partnership, or confirm specific terms.
- Trade talks with India continue, despite the tariff threats. Markets and policymakers will be watching for how New Delhi responds and whether Pakistan’s reserves enter regional energy markets.
This move underscores ongoing American efforts to reshape trade and energy alignments in South Asia, as Trump’s administration potentially shifts focus toward Pakistan while exerting economic pressure on India.