“Pakistan has vast untapped energy potential,” US President Donald Trump declared last month, “and America should be its partner in developing it.”
His call for energy cooperation with Pakistan caught many observers by surprise. For decades, Pakistan-US relations have been dominated by questions of security and aid, with energy rarely in the spotlight. Trump seems to see a new opportunity, with Pakistan’s resources, long underutilised, as the foundation of a redefined partnership with Washington.
Pakistan’s energy story is one of challenge and fraught past ambition, but also of enormous promise. The energy landscape is indeed at a crossroads. The country remains heavily dependent on imported oil and gas, but recent discoveries, surveys, and rising investment interest have led to increased focus on tapping domestic resources. Trump’s call gives that ambition sharper global recognition.
Energy is a new frontier in Pakistan-US relations, offering a shift from a security-driven past to an economic and resource-focused future.
As of the end of last year, Pakistan’s proven oil reserves stood at about 238 million barrels, up 23% from 193 million barrels the year before. Though modest globally, the increase underscores the country’s latent potential. Production lags far behind demand, keeping Pakistan reliant on costly imports. In fiscal year 2023-24, the petroleum import bill stood at US$15 billion, a heavy drain on foreign reserves. This is precisely why Trump’s remarks matter: every step toward domestic production not only saves costs but also builds resilience, making the case for deeper US engagement.
The potential does not end with conventional reserves. According to the US Energy Information Administration, Pakistan may hold up to 9 billion barrels of recoverable shale oil and 105 trillion cubic feet of shale gas. These resources, concentrated in the Lower Indus Basin, could transform Pakistan’s energy profile if developed effectively. But unlocking them requires advanced technology, capital and expertise. This is where Trump’s framing resonates. The US firms could become crucial partners in bringing shale from promise to production, while Pakistan offers the resources, market and strategic location.
Beyond hydrocarbons, Pakistan’s mineral wealth, valued at US$6-8 trillion, includes copper, lithium and rare earths, all critical for clean energy transitions and technological security. For the United States, diversifying supply chains for these sectors is a strategic priority, highlighting energy and minerals as shared interests rather than contested spaces.
Pakistan’s energy story is one of challenge and fraught past ambition, but also of enormous promise (Aamir Qureshi/AFP via Getty Images)
Offshore exploration adds another dimension. In early 2024, a seismic survey in the Indus Basin revealed promising subsurface structures that may contain hydrocarbons. Though still early, such prospects reinforce the idea that Pakistan is far from resource-poor. Rather, it is a nation on the cusp of converting geological promise into economic strength, with concurrent benefits for industrial growth, job creation and the broader economy.
Historically, Pakistan-US ties have swung with geopolitics but economic cooperation has endured. The United States is Pakistan’s largest export market, accounting for about 17 per cent of exports and a consistent source of foreign direct investment. American companies already operate in ICT, consumer goods, finance and renewables. Adding energy to this list would give the bilateral relationship a firmer basis for expanded cooperation. Trump’s suggestion that Pakistan could even become a future exporter to neighbours including India may sound ambitious, but it captures the scale of potential Washington now associates with Islamabad. Energy is no longer peripheral; it is being placed at the centre of how Pakistan and the United States might cooperate.
None of this comes without challenges. Developing shale is capital-intensive, offshore drilling carries risks, and political instability can unsettle investment. Environmental safeguards must also be central if these projects are to succeed sustainably. Yet these hurdles only reinforce the need for credible partners who can bring expertise and resources – the very point underscored in Trump’s call for cooperation.
With sustained reforms, the right mix of investment, and strong international partnerships, Pakistan has the potential to not only meet its domestic needs but also emerge as a future exporter in the region.
Trump’s remarks, therefore, are more than rhetoric. They highlight energy as a new frontier in Pakistan-US relations, offering a shift from a security-driven past to an economic and resource-focused future. If translated into action, this vision could help Pakistan turn its geological wealth into economic strength while giving the US a reliable partner in South Asia’s energy landscape. For both nations, the path forward lies in turning potential into partnership.
The article appeared in lowyinstitute
