Trump Claims US to Develop Oil Reserves in Pakistan, May Sell to India

K N Mishra

    31/Jul/2025

What's covered under the Article:

  • Trump announced a US-Pakistan oil deal, saying the countries will jointly develop Pakistan’s oil reserves.

  • He hinted that Pakistan might sell oil to India someday while also announcing a 25% tariff on Indian goods.

  • Trump’s comments came amid growing tensions over trade talks between India and the US, with no concrete deal reached.

In a significant development that could reshape South Asian energy geopolitics, US President Donald Trump has announced a strategic energy partnership with Pakistan, revealing that the United States and Pakistan have concluded a deal to jointly develop Pakistan's oil reserves. In a post shared on his social media platform Truth Social, Trump also made a provocative remark, stating that "maybe they’ll be selling oil to India someday."

This declaration comes amid heightened economic maneuvers by the United States as it navigates complex trade relations with key countries, including India. The announcement of a 25% tariff on Indian goods, as well as a penalty on India’s purchases of Russian defense and energy products, underscores the increasingly transactional approach of the Trump administration toward bilateral partnerships.


The US-Pakistan Oil Partnership

President Trump’s announcement centered around the development of Pakistan’s untapped oil reserves, which have long been speculated to hold significant potential but remain underdeveloped due to lack of capital and technical expertise. According to the President’s Truth Social post:

“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!”

The tone of this statement carries both economic and diplomatic undertones, suggesting that the deal not only represents an investment opportunity for American energy firms but may also have strategic implications in the India-Pakistan-US trilateral equation.

This is the first time a sitting US President has explicitly mentioned developing Pakistan’s energy assets as part of an official deal, especially with a public nod to potential cross-border trade involving India, Pakistan’s historical rival.


India Tariff Announcement Sparks Diplomatic Concerns

Just hours prior to the announcement of the oil partnership, Trump also declared a 25% tariff on Indian goods, as part of a broader trade policy that aims to reduce the US trade deficit. Additionally, Trump imposed extra penalties on India’s procurement of Russian military equipment and energy products, reflecting his administration’s disapproval of India’s strategic alignment in key sectors.

In a separate statement, White House economic adviser Kevin Hassett confirmed that the move is intended to "address and remedy" the lack of progress in trade negotiations with India. According to Hassett:

“President Trump is frustrated with the lack of movement on trade talks with India. The tariffs are a step to push forward negotiations.”

The bilateral trade negotiations between India and the US have been ongoing but have failed to yield a concrete agreement due to contentious issues such as digital trade barriers, tariffs on agricultural goods, and India’s insistence on strategic autonomy.


Strategic Implications of Trump’s Statements

The timing and nature of Trump's dual announcements—a partnership with Pakistan on oil and a tariff penalty for India—are being interpreted by international observers as a calculated diplomatic message. The developments raise questions about the future of India-US strategic relations, especially in the Indo-Pacific region, where both countries have cooperated on defense, technology, and counterterrorism.

While India and the United States have engaged in a growing defense and energy partnership over the past decade, recent tensions over trade, data protection laws, and defense procurement have created rifts. Trump's tariff announcement is being viewed by analysts as a pressure tactic designed to force New Delhi into accepting US terms in trade negotiations.

The simultaneous emphasis on building an oil alliance with Pakistan, a country with which the US has historically had an uneasy but functional relationship, adds a new dimension to Washington's South Asia policy.


US Energy Diplomacy and South Asia

The development of Pakistan’s oil reserves could serve multiple US objectives:

  • Diversifying energy sources to reduce dependence on Middle East oil.

  • Creating new markets for American energy companies.

  • Strengthening diplomatic ties with Pakistan, potentially as a counterweight to increasing Chinese influence in the region.

  • Strategically provoking India by elevating Pakistan’s role in energy diplomacy.

With Pakistan’s economy struggling with external debt, dwindling foreign reserves, and rising inflation, foreign investment in its energy sector could offer a much-needed boost. However, any tangible development will depend on how the domestic political environment and regulatory frameworks evolve in the months ahead.

Moreover, for Pakistan to export oil to India, there would need to be significant breakthroughs in bilateral diplomacy, which currently remains at a stalemate due to issues such as Kashmir, cross-border terrorism, and trade suspensions.


India’s Response and Domestic Reactions

The Indian government has yet to issue an official response to either of Trump's announcements. However, trade and foreign policy experts in New Delhi are watching the situation closely. Some see Trump’s remarks as an attempt to destabilize India’s strategic autonomy, while others believe that India could use this moment to assert its trade interests more strongly.

The announcement of potential oil cooperation between the US and Pakistan, coupled with punitive measures against India, may fuel nationalist sentiments domestically and could become a politically sensitive issue, especially in the run-up to major elections.


Conclusion: A Geopolitical Shift in the Making?

President Trump's dual announcements signal a major strategic play in South Asia, combining energy development, trade pressure, and diplomatic signaling. By partnering with Pakistan on oil exploration and penalizing India with tariffs, the US appears to be recalibrating its influence across the subcontinent.

While these moves could generate economic opportunities, they also carry risks of disrupting existing alliances, intensifying regional rivalries, and complicating future negotiations. The coming months will be critical in determining whether these initiatives lead to substantive gains or remain political posturing in an election-driven foreign policy narrative.

What remains clear is that energy diplomacy and trade leverage are now central to the Trump administration’s strategy, and South Asia is firmly in its crosshairs. Whether this will yield a new equilibrium or deeper tensions, only time—and the reactions from New Delhi and Islamabad—will tell.


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