By Parth R. Rajiv
President Trump’s July 2025 claims about “massive” Pakistani oil reserves have raised eyebrows in Washington and Islamabad. Trump boasted that the US had “concluded a Deal… to develop [Pakistan’s] massive Oil Reserves”, even suggesting Pakistan might one day sell US-drilled oil to India. But independent data paint a starkly different picture, Pakistan’s proven reserves are only around 234–353 million barrels, roughly enough to meet domestic demand for two years at current consumption. In fact, oil is Pakistan’s largest import, about $11.3 billion in FY2025, nearly 20% of all imports, and its domestic output covers just 15–20% of needs. As one analyst quipped, Trump’s pronouncements “could serve political motives rather than energy motives”. In short, the US promise to drill Pakistan’s “massive” reserves appears more headline than substance.
Iran, Qatar and Saudi Arabia currently meet about 85% of Pakistan’s oil and gas needs. Even after aggressive offshore exploration and shale surveys, Pakistan’s oil finds have been modest and uncommercial . The U.S. Energy Information Administration notes Pakistan has technically recoverable shale resources, but none have been developed. As of the writing of this article, Pakistan still import 80–85% of their oil, making Trump’s talk of oil self-sufficiency look like fantasy. Instead, Pakistani refiners have only just agreed to import U.S. crude oil for the first time, a one-million-barrel “test” shipment from Vitol, under a newly negotiated trade deal. That deal, struck after Trump threatened 29% tariffs, will lower U.S. duties on Pakistani exports to 19%, but it does not create any proven new oil fields. Even U.S. media note that Pakistan “continues its efforts” to exploit hoped-for fields, but “no substantial progress has been made to date”. In fact, Pakistani leaders themselves admit the country has long “dreamed of finding” enough oil to become an energy powerhouse, a dream that “so far has failed”
New Trade and Energy Thrust in US-Pak Ties
The oil announcement came as part of a sudden upswing in U.S.-Pakistan engagement. In late July of this year, Pakistani and U.S. officials unveiled a broad economic agreement encompassing trade, energy, mining, IT and even cryptocurrency. Islamabad hailed it as “the beginning of a new era of economic collaboration” with Washington. The pact followed months of Trump administration pressure, after first warning of steep tariffs of 29%, the White House agreed to a reduced tariff rate around 19% on Pakistani goods. Pakistan’s largest refiner, Cnergyico, promptly announced it would import one million barrels of U.S. crude from Vitol in October, the first-ever American oil sale to Pakistan.
In return, Trump publicly touted cooperation on Pakistan’s oil fields. On social media, he declared the trade deal had been “concluded…to work together on developing [Pakistan’s] massive Oil Reserves” . (Further musing that Pakistan “maybe” could sell oil to India someday) Yet Reuters notes that Pakistan’s actual shale and offshore reserves remain largely untapped, and only technical estimates of billions of barrels exist. U.S. officials quietly concede the Trump administration’s goal is less about “striking black gold” than using the energy pact as leverage, one British analyst points out it was designed to “wean Pakistan… away from its increasing dependence on China”
Pakistan’s public statements reflect the enthusiasm. Finance Minister Aurangzeb praised the deal as one that would spur “investment… in energy, mines and minerals, IT, cryptocurrency and other sectors” . He emphasised that trade and investment must “go hand in hand”. Islamabad quickly credited Washington for brokering peace in the recent IndiaPakistan clash, even nominating President Trump for a Nobel Peace Prize. Trump has long been boasting that he alone averted a nuclear conflict by threatening trade sanctions. Overall, Trump’s outreach with a tariff + trade package has delivered at least symbolic gains, Pakistani senators enthused they “couldn’t ask for more” as concessions rolled in.
India’s Reaction: Strained Ties with a Critical Partner
But America’s new Pakistan enthusiasm has alarmed New Delhi. Especially, as the thaw in US ties with its neighbouring adversary comes after India’s Operation Sindoor, which witnessed first strikes deep into Pakistani territory since the 1971 war. Operation Sindoor was in response to the 22 May Pahalgam terror attacks in Kashmir, which India says were undertaken by Pakistani state-sponsored terrorists. U.S.-India relations had blossomed over the past two decades as both democracies sought to counter a rising China. India has tolerated occasional U.S.-Pakistan contacts, which were broadly waning over the past years, but a White House lunch with Pakistan’s army chief crossed a red line. In June 2025, Mr. Trump hosted General Asim Munir at the White House, the first time a U.S. President granted a private audience to a Pakistani military chief. Munir, considered de facto the most powerful man in Pakistan, was recently elevated to the rank of Field Marshall, after his country took a severe beating in the recent clashes with its larger neighbour. New Delhi responded with a diplomatic protest. Indian officials warned that America was “sending the wrong signals” by “wooing” Pakistan’s military elite just after Islamabad allegedly supported attacks on Indian civilians. Irking India was also the fact that only days prior to the dastardly terror attacks in Pahalgam, Munir had raked up Kashmir in a hateful speech that was widely viewed as a call for violence and savagery against India. Indian foreign ministry noted that it had “taken note” of Trump’s claims about mediating the ceasefire, a claim India flatly rejected.
Analysts say the Indian reaction is understandable. “The U.S. is engaging with Pakistan so intensely, seemingly not taking Indian concerns into account,” comments Michael Kugelman of the Asia Pacific Foundation. That has generated a “bilateral malaise” in what were once warm U.S.-India ties. On India’s side, both Prime Minister Modi and his advisers insist that May’s ceasefire was won by the two militaries alone, not by U.S. intervention. Modi publicly told Trump, “We will not differentiate between the government sponsoring terrorism and the masterminds of terrorism”, making clear any hint of leniency on Pakistan’s purported militant networks would be unacceptable. New Delhi has long asserted that a cessation in hostilities was brought about by a phone call by the Pakistani DGMO to his Indian counterpart. In short, while Islamabad hailed Trump as a peacemaker, New Delhi is agonised at what it sees as Washington rewarding Pakistan’s generals. Even a top Pakistani official acknowledged India viewed Munir’s meeting as an “extreme religious” affront”, underscoring how fraught the situation is.
If U.S.-India ties sour further, it could undercut Washington’s regional strategy. India today is a linchpin of the U.S. Indo-Pacific plan, its the fourth-largest economy of the world and only viable counterweight to China. By contrast, Pakistan’s GDP is about one-twentieth of India’s and it remains economically fragile. Pakistani commentators themselves worry the Trump “flirtation” is tactical and transient, the country’s trade with the U.S. is tiny, only 5% of India’s, and critics note that Islamabad is offering lopsided concessions, which include minerals, crypto, and no tariff barriers with little leverage to demand more. On the U.S. side, one senior official insists America “enjoys strong relationships with both India and Pakistan” and will “not compare” them, but India is watching closely. Any further U.S. pressure on trade or security cooperation could push New Delhi to hedge even more toward China or Russia, hardly a helpful outcome if Washington truly seeks an anti-Beijing bloc.
Asim Munir, Cryptocurrency and Pakistani Contradictions
Amidst this diplomatic shuffle, Mr. Trump has signalled America’s focus on Pakistan’s military and economic elites. The Oval Office lunch with General Munir lasted two hours and touched on odd topics, according to Pakistan’s military, the agenda included “trade, economic development, and cryptocurrency” . (The U.S. side declines to comment on the private meeting.) Munir told reporters he had urged Trump to stay out of an Israel-Iran war, while Trump said Pakistan knows Iran “very well”. More strikingly, after the meeting Trump said he would work on a trade deal with both India and Pakistan, a claim that surprised many since he had just threatened crippling tariffs on India’s steel and aluminium.
This unprecedented outreach to Pakistan’s army chief highlights a stark contrast within Pakistan’s economy. The Trump-Munir partnership has opened doors for cryptocurrency investment and crypto-mining ventures, even as the country’s power grid struggles to meet basic needs. Pakistan has earmarked gigawatts of “surplus” electricity for bitcoin mining and AI data centres, a plan that seems perverse to citizens who still endure daily blackouts. As one Pakistani school principal put it, reliable power is so scarce that people joke about having solar panels without fuel to run them at night. In this light, the U.S. embrace of Pakistani crypto projects, even indicating a letter of intent with a Trump-familybacked firm in April, appears incongruous to say the least.
Even Pakistani observers are wary of the hype. Former diplomats note that Islamabad has offered Washington “minerals, crypto and a trade deal with no tariffs” , essentially on credit. Veteran ambassador Maleeha Lodhi warns that “flattery is not a strategy as it’s not long-term”. Another analyst quips that Trump has historically engaged Pakistan only “when he needed to” and retreated otherwise. Today, Pakistan’s generals have captured Trump’s attention by seeming to neutralise the India threat, but it’s unclear what the generals have “to offer” the U.S. beyond promises. In public, Washington has designated a Baloch insurgent group in Pakistan as a terrorist organisation and acknowledged Islamabad’s help capturing ISIS terrorists, suggesting security cooperation is one real area of value. But any progress will depend on U.S. trust in Pakistan’s intentions, a major question given Pakistan’s history of double-dealing. After all, this is the nation that hosted Osama bin Laden next to a military compound.
China, Pakistan’s Limits and India’s Rise: A Fragile Balance
Underpinning all this is the great-power context. For years, starting with the Clinton administration, U.S. policymakers saw India as the essential partner against China’s rise. As one analyst observes, “geopolitically, India remains the more logical partner” for Washington, since both fear Beijing. Pakistan, by contrast, has become heavily dependent on Chinese investment and military hardware, the very Belt and Road projects and railroads stretching across its territory. Trump’s recent outreach can be seen partly as an attempt to peel Islamabad away from Beijing’s orbit. But given Pakistan’s precarious state, a fragile economy surviving on IMF bailouts, and powerful generals calling all major shots, there are limits to what the U.S. can extract. Islamabad has already stretched itself by allocating precious fuel and electricity to crypto; its ambitious talk of oil or mineral wealth so far outstrips delivery that U.S. investors remain skeptical.
By contrast, India’s economy is mammoth to that of Pakistan and continues to attract foreign investment. Its democratic government is more stable and transparent, making it a more dependable partner for U.S. policymakers. The growing importance of India means Washington may find it difficult to sustain a deep Pakistan tilt. If New Delhi feels consistently sidelined, even as Pakistan re-enters the Indo-Pacific equation, U.S. influence in the region could take a severe blow. Already, media reports suggest that India is recalibrating ties with China partly as a hedge against U.S. unpredictability. Indian PM Modi is set to visit Tianjin, China, next month after almost seven years for the SCO summit. Only days back, visiting Chinese foreign minister, Wang Yi, was accorded the opportunity to call-on the Prime Minister apart from his counterpart; a rare privilege extended to the Chinese. The U.S. strategy appears to be testing whether balancing China requires bringing Pakistan in line. But that strategy is fraught, Pakistan’s economy runs on imports, oil being a fifth of its import bill, its politics are dominated by a military that has clashed with U.S. goals before, and it still lacks the infrastructural base, even steady power, to be a high-tech energy hub.
Trump’s Mercurial Approach and Consequences for Washington
All of these developments, oil boasts, tariff threats, surprise meetings, reflect the highly personalised nature of the Trump administration’s foreign policy. Analysts highlight the “mercurial and personalised” sty, one U.S. expert notes “an administration which changes its tune by the hour… You’re dealing with an administration that is mercurial and personalised, and you don’t associate that with traditional US foreign policy”. Unequivocally, Trump’s court-centric diplomacy has made U.S. strategy unpredictable. One Pakistani political commentator quips that his country “instinctively knew how to respond to the protocol of the court of Donald Trump”, nominating Trump for a peace prize one day and publicly rebuking him the next.
The long-term consequences of this erratic tilt are far from clear. In the near term, Pakistan’s leaders are claiming victory, their lobbyists lowered tariffs, secured U.S. cooperation in counterterrorism, and even won a first U.S. oil deal. But experts warn these gains may not last. As CUNY lecturer Raza Rumi comments, unless such engagement “is institutionalised… it’s another tactical romance” that “could fade once strategic goals are met or regimes change”. To wit, Pakistan’s generals may have Trump’s ear for now, but if they fail to produce tangible results on oil, trade, or the coveted Imran Khan release, American interests could evaporate just as easily as they emerged. Meanwhile, India is likely to keep testing U.S. resolve, ensuring any American Pakistan-policy risks undercutting broader alliances.
Trump’s new Pakistan policy reveals a superficial grasp of the region. It prizes short-term theatrics and personal relationships that include theatrics of oil hype, crypto pitches and star-struck lunches, over deeper strategic consistency. For the U.S., the gamble is that the White House can both engage Pakistan and keep India on side. So far the early returns are mixed. If Washington’s goal was to realign Pakistan away from China, it must reckon with Pakistan’s systemic weaknesses; if it alienates India, it undercuts its own counter-China strategy. Experts caution, the U.S. is engaging in another South Asian “tactical romance”, one that may serve Trump’s ego, but poses serious questions for America’s long-term influence and relevance in the Indo-Pacific.