On July 31, 2025, President Trump announced that the United States has reached an agreement with Pakistan to collaborate on the development of oil resources within Pakistan’s borders. Trump stated that Washington is in the process of selecting the oil company responsible for this partnership.
“We have just reached an agreement with Pakistan to jointly develop its vast oil reserves,” Trump wrote on social media. “We are currently selecting the oil company to lead this partnership.”
The details of the agreement were not disclosed in Trump’s post. However, it is speculated that this collaboration may be part of a broader trade agreement.
Shortly after Trump’s announcement, Pakistan’s Foreign Minister Ishaq Dar confirmed the agreement on social media but did not provide further details.
Although Trump did not mention a tariff agreement, Pakistan’s Finance Ministry stated on Thursday that the trade deal “will lead to a reduction in equivalent tariffs, especially concerning Pakistan’s exports to the United States,” without specifying which tariffs will be reduced.
“This agreement marks the beginning of a new era of economic cooperation, particularly in energy, minerals, information technology, cryptocurrencies, and other sectors,” the statement from Pakistan’s Finance Ministry said.
In a meeting with U.S. Secretary of State Marco Rubio, Dar and Rubio discussed expanding trade cooperation, deepening anti-terrorism agreements, and exploring the potential for enhanced collaboration in crucial mineral and mining sectors.
Furthermore, U.S. State Department officials, along with Pakistan’s Federal Minister for Energy (Petroleum) Ali Pervaiz Malik, held an online briefing at the end of June, inviting American companies to participate in the exploration and development of key minerals such as copper, gold, lithium, and antimony in Pakistan.
Analysts believe that this agreement will help the U.S. secure essential minerals and reduce dependency on China.
In August this year, the U.S. and Pakistan will hold counterterrorism dialogues in Islamabad, aiming to further discuss cooperation in combating ISIS-K.
Reuters analysis suggests that the U.S. is strengthening ties with Asian countries to counter China’s influence in the region.
Trade and security cooperation between the U.S. and Pakistan has been increasing in recent years. According to data from the Office of the U.S. Trade Representative, total merchandise trade between the U.S. and Pakistan reached $7.3 billion in 2024, showing nearly a 6% increase from the previous year. The U.S. has also designated Pakistan as one of its “major non-NATO allies.”
In June 2025, President Trump hosted Pakistan’s Army Chief of Staff Asim Munir at the White House for an unprecedented two-hour meeting. Trump expressed satisfaction with meeting Munir and credited the cooperation between Munir and Indian Prime Minister Modi for averting a potential nuclear war.
Pakistan’s military revealed that discussions between the two parties included trade, economic development, and cryptocurrencies.
“Munir expressed keen interest in establishing a mutually beneficial trade partnership with Pakistan based on long-term strategic alignment and shared interests,” Pakistan’s military stated.
Munir further mentioned that he would nominate Trump for the Nobel Peace Prize.
It is widely believed that Pakistan plays a crucial role in China’s Belt and Road Initiative. However, the U.S.’s active involvement in Pakistan’s energy and mining sectors, as well as strengthening security and counterterrorism dialogues, is seen not only as an economic move but also as a strategic step to counter China’s expanding influence in South Asia, potentially diminishing the long-term impact of the China-Pakistan Economic Corridor.
In the past years, projects under the China-Pakistan Economic Corridor have faced local violence and resistance, leading to delays and reduced investments. Many high-value developments have failed to benefit local communities, sparking controversies like completed airports with no planes or passengers, prompting widespread criticism.
A report by the RAND Corporation in January 2025 mentioned that if China-Pakistan relations continue to deteriorate, it could have significant geopolitical consequences. Pakistan might prioritize its strategic partnership with the U.S. over China in such a scenario.