US, Pakistan Sign Trade Deal to Boost Oil Exploration and Economic Ties
The United States and Pakistan have signed a new trade agreement that includes plans to explore oil reserves in Pakistan.
The deal was announced on Thursday and is being seen as a significant step in strengthening economic ties between the two countries.
US President Donald Trump shared the news on his social media platform Truth Social, saying:
“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!”
He also said the agreement is part of a broader push to reduce the US trade deficit, and mentioned that several other countries are also making offers for tariff reductions. “All of this will help reduce our Trade Deficit in a very major way,” Trump added.
Pakistan’s Ministry of Finance confirmed the agreement in a statement, calling it a new chapter in economic cooperation. The ministry said the deal will benefit both countries by boosting trade and investment.
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The statement said, “In a significant development, Pakistan and the United States finalized a trade agreement aimed at boosting bilateral trade, expanding market access, attracting investment, and promoting cooperation in areas of mutual interest.”
According to the Ministry of Finance, the agreement was finalized today in Washington, D.C., during a meeting between Pakistan’s Finance Minister, Muhammad Aurangzeb, US Secretary of Commerce Howard Lutnick, and US Trade Representative Jamieson Greer.
The statement further noted that the deal marks the beginning of a new chapter in economic cooperation between the two countries, covering sectors such as mining and minerals, information technology, cryptocurrency, and, most notably, energy.
As part of the agreement, both countries will reduce trade tariffs, which is expected to help Pakistani exports enter the US market more easily. However, neither side disclosed details regarding the level of tariffs that will be imposed on each other’s imports.
The agreement was finalized after several months of talks. Aurangzeb traveled to Washington earlier this week to take part in the final negotiations. Both countries also held several virtual meetings during the process.
While Pakistan has some proven oil reserves, experts say they are relatively small. However, recent studies suggest there may be larger reserves off Pakistan’s coast, and the new deal will allow US companies to explore and possibly extract oil in those areas.
Prime Minister Shehbaz Sharif welcomed the deal, calling it historic, and thanked President Trump for supporting economic cooperation.
This agreement comes at a time when the US has also imposed 25 percent tariffs on Indian imports, increasing tensions with New Delhi.
In contrast, the deal with Pakistan shows an improvement in trade relations between Islamabad and Washington.
The agreement opens the door for American energy companies, whose names have yet to be made public, to potentially take charge of future oil exploration and extraction projects in Pakistan.
Although no clear timeline or operational roadmap has been released, the collaboration could carry long-term implications for South Asia’s energy landscape.
If progress leads to surplus production, Pakistan may even emerge as a future oil supplier to neighboring countries, including India.
