Trump’s Pakistan oil deal could shake global energy

Trump’s deal to tap Pakistan’s oil could shift U.S. policy, pressure India and counter China’s rising influence

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U.S. President Donald Trump’s surprise announcement of a deal to develop Pakistan’s “massive oil reserves” could mark a sharp turn in Washington’s foreign policy. The move raises questions about whether America is shifting closer to Pakistan to counter China—or simply using it to pressure India.

“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 someday!” Trump posted on Truth Social.

The announcement caught many by surprise. Pakistan has long dreamed of striking it rich with oil, yet the country still depends heavily on imports. Oil alone made up nearly a fifth of its total import bill last year, according to the Pakistani central bank. For a fragile economy burdened by debt and inflation, striking oil would be transformative.

In 2015, the U.S. Energy Information Administration estimated that Pakistan might hold up to 9.1 billion barrels of shale oil, mostly in the Sembar and Ranikot formations. The figure created a stir but never translated into production.

A more cautious U.S. Geological Survey assessment two years later suggested only 164 million barrels of technically recoverable oil. Since then, exploration efforts have failed to deliver results.

Trump’s declaration suggests new optimism. Last September, reports circulated of a potential “massive” offshore oil and gas discovery in Pakistani waters. The find, said to have been mapped in cooperation with an “allied nation,” was hinted at in media reports as potentially one of the largest in the world. While officials never disclosed the partner, speculation centred on Saudi Aramco or the United Arab Emirates. According to those reports, the surveys pinpointed deposits that could reshape Pakistan’s energy future.

Even if the reports are accurate, significant hurdles remain. Unlocking such reserves would require at least $5 billion in investment and several years before production could begin.

The biggest obstacle is security. Oil majors have long avoided Pakistan because the cost of protecting staff and assets outweighs the potential rewards. Washington’s involvement could change that calculus by providing the backing and stability investors have been waiting for.

The stakes extend beyond Pakistan’s borders. A major oil discovery there, especially with U.S. involvement, could shift global energy markets, affecting everything from oil prices to regional stability. That would have consequences for Canada, whose economy depends heavily on both resource exports and global trade stability.

The geopolitical implications are just as significant as the economic ones. The U.S. has long walked a tightrope between India and Pakistan, two nuclear-armed rivals. In recent decades, Washington tilted toward India, both for its vast market and as a counterbalance to China. That policy left Pakistan increasingly dependent on Beijing, which invested billions through the China–Pakistan Economic Corridor.

Trump’s announcement raises the possibility that the U.S. is seeking to pull Pakistan back into its orbit. By dangling the promise of energy wealth, Washington could be seen as attempting to reduce Beijing’s growing influence over Islamabad. At the same time, the move could be designed to pressure India, urging it to open its markets wider to American goods and weapons while loosening its traditional ties with Russia.

But Trump is nothing if not unpredictable. Some will view the oil announcement less as a carefully crafted strategy and more as a bargaining chip in a larger game of geopolitical chess. The real test will come in whether the U.S. follows through with the billions in investment and security support needed to make the reserves viable.

For Pakistan, the stakes are enormous. Success could ease its crushing energy import bill and provide much-needed revenue. Failure, on the other hand, would reinforce Pakistan’s long record of unfulfilled energy ambitions and deepen its reliance on foreign powers.

Whether this is the start of a new U.S. strategy in South Asia or simply a tactical ploy remains uncertain. But Trump’s move has put Pakistan back on Washington’s radar and raised the stakes in a region where every shift in policy reverberates across the globe.

Canadians should pay attention: the consequences will not stop at South Asia’s borders.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.