Pakistan's "Massive Oil Reserves" Are a Diplomatic Asset, Not an Energy Plan

In late July 2025 President Donald Trump announced on Truth Social that the United States had concluded a deal with Pakistan under which the two countries would work together on developing Pakistan's "massive Oil Reserves", and that Washington was choosing the oil company to lead the partnership. The announcement accompanied a trade arrangement that left Pakistan facing a 19 per cent US tariff, lower than its South Asian neighbours and far below the 50 per cent applied to India.

In September Prime Minister Shehbaz Sharif and army chief Asim Munir were received in the Oval Office, and a USD 500 million agreement for US investment in Pakistan's minerals sector followed. Pakistani officials have pointed to a 2015 estimate by the US Energy Information Administration that the lower Indus basin could hold around 9 billion barrels of technically recoverable shale oil. But as reporting by The Guardian, Dawn and others has shown, there is no confirmed evidence of large untapped conventional reserves.

Pakistan produces a modest amount of crude oil, about 65,000 barrels a day according to figures cited by The Guardian, and imports more than 80 per cent of its oil needs. Moin Raza Khan, a former managing director of Pakistan Petroleum Limited, told the newspaper that only about 1.2 billion barrels of oil had been discovered in total in Pakistan's history. The EIA's 2015 estimate refers to technically recoverable shale resources, which is not the same as proven or commercially viable reserves.

The risk is that expectations of an oil bonanza influence decisions that should be based on known facts. Pakistan should keep the exploration door open and make it as attractive as possible: transparent bidding, stable fiscal terms, and security arrangements that allow companies to operate. At the same time, energy planning should be based on what Pakistan can be confident of. The oil reserves narrative has served Pakistan's diplomacy well, helping secure better trade terms and renewed US engagement.

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