Islamabad, Pakistan – Pakistan’s Prime Minister Shehbaz Sharif has praised a new, “historic” trade agreement with the United States, thanking U.S. President Donald Trump for his leadership in finalizing the deal. The agreement, announced on July 30, 2025, includes a key provision for the two nations to collaborate on developing Pakistan’s “massive oil reserves.”
For years, Pakistan has claimed to have significant oil deposits along its coast, but these resources have remained untapped. The country currently relies on oil imports from the Middle East to meet its energy needs. The new partnership with the U.S. aims to change that, with the U.S. now in the process of selecting a company to spearhead the development of these reserves.
Key Aspects of the U.S.-Pakistan Trade Deal, The landmark agreement, finalized during a meeting in Washington, D.C., is designed to: Boost Bilateral Trade: The deal is expected to increase trade between the two countries. Reduce Tariffs: Reciprocal tariffs will be lowered, specifically benefiting Pakistani exports to the U.S.Expand Market Access: The agreement will enhance market access for both nations. Attract Investment: It is expected to encourage increased U.S. investment in Pakistan’s infrastructure and development projects. Foster Cooperation: The partnership will focus on collaboration in key sectors, including energy, mines and minerals, information technology (IT), and cryptocurrency.
Prime Minister Sharif celebrated the deal on social media, expressing his hope that it would expand the “enduring partnership” between the two countries. President Trump also commented on the agreement via Truth Social, noting the potential for Pakistan to eventually sell oil to other nations, including India.
This new trade agreement marks a significant step forward in economic relations between the U.S. and Pakistan, with a strong focus on unlocking Pakistan’s previously untapped oil and gas resources and fostering broader economic growth.
United States and Pakistan Announce Historic Trade Deal, This new trade and energy agreement between the U.S. and Pakistan marks a significant pivot in their bilateral relationship, moving beyond traditional geopolitical considerations to focus on economic collaboration and energy security. For Pakistan, which has long grappled with a substantial energy import bill—accounting for nearly a fifth of its total imports—the prospect of developing its own “massive oil reserves” is a game-changer. The deal offers a potential pathway to not only reduce its dependence on Middle Eastern suppliers but also to diversify its energy sources, a move that could stabilize its fragile economy.
While the rhetoric from both leaders has been enthusiastic, the practical challenges remain. Pakistan’s claimed oil reserves, particularly the offshore deposits, are largely unproven. Tapping into them will require enormous investment and advanced technology, precisely the kind of resources that this partnership with the U.S. aims to provide. The success of this endeavour will hinge on the selection of a capable U.S. oil company and the long-term commitment of both governments to see the project through.
As United States and Pakistan Announce Historic Trade Deal, Beyond the energy sector, the deal’s provisions for tariff reductions and investment in other areas like IT and cryptocurrency signal a broader strategy to deepen economic ties. For the U.S., this agreement could be seen as a strategic move to strengthen its position in the region and counterbalance the influence of other global powers. The ambitious vision of Pakistan eventually exporting oil, perhaps even to its neighbour and rival, India, adds a fascinating layer of geopolitical complexity to the narrative. As the details of the agreement unfold and the initial steps of the partnership, such as the upcoming U.S. crude oil shipment to Pakistan, are taken, the world will be watching to see if this “historic” deal can live up to its promises and reshape the economic future of Pakistan and its role in the global energy market.