In a bold pivot in regional trade and energy policy, U.S. President Donald Trump announced a partnership with Pakistan to jointly develop the country’s "massive" oil reserves. The public announcement was made via Trump’s Truth Social post on Wednesday, shortly after unveiling new trade penalties on India.

Trump stated that a U.S. oil company is being selected to lead the venture but did not name one or provide a project timeline. He also suggested Pakistan might one day export oil to India, hinting at future regional market implications.

Earlier the same day, Trump imposed a 25% tariff plus an unspecified "penalty" on imports from India effective August 1, criticizing India’s high trade barriers and its procurement of Russian energy and military equipment. Despite the tough stance, he added that talks with New Delhi are still ongoing.

Pakistani officials confirmed that the deal includes tariff reductions on exports to the U.S., although exact terms remain undisclosed. The agreement coincides with intensifying U.S. efforts to bolster ties in Asia and counterbalance China’s influence.

U.S. goods trade with Pakistan reached $7.3 billion in 2024, with a trade deficit of $3 billion, underscoring the economic undercurrent driving this strategic move.