Was it pique with India that prompted Donald Trump to announce a trade deal with Pakistan? The latter announcement came hours after the US president announced 25% tariffs on goods imported from India.
For good measure, he had also added, “Pakistan and the US will work together on developing their massive oil reserves”, and raised the possibility of India buying oil from Islamabad sometime in the future.
Let’s look at the trade deal first: no details are available in the public domain. The word is it will be made public after similar negotiations with other countries are concluded. The negotiations seemed to have lasted all of four days and Prime Minister Shehbaz Sharif described it as “historic”. Reports suggest Pakistan has got relief from the 29% tariff threatened on its exports to the US. Total bilateral trade is a little over $7 billion in favour of Islamabad.
The oil deal has evoked interest. Contrary to Trump’s claim of
“massive oil reserves”, Pakistan’s reserves estimated in a 2016 study by the US Energy Information Administration, placed it at 353.3 million proven barrels. Current daily oil production in Pakistan is around 88,000 barrels which is below national consumption forcing the country to import.
A three-year survey conducted in Pakistan reportedly identified “large underwater structures with oil and gas signature”, but these claims are yet to be substantiated. In fact, Muhamad Arif a technical expert who had served with Pakistan’s Oil and Gas Regultory Authority, has said that these cannot yet be classified as “reserves.” This is because they are not discovered, commercially viable, and supported by a full development plan.
A 2022 report by the Express Tribune claimed Balochistan had recoverable oil reserves of 1.84 million barrels, 0.24 million of which had been used, and Khyber-Pathkunkhwa had 264.83 million of which 170.59 million were consumed. So far, Pakistan’s attempted explorations in these regions have been limited, largely due to security challenges.
As for exporting oil or gas to India, that maybe premature since there is no clarity on whether Pakistan has enough to export. Then again, given the strains in their relationship, it is unlikely India will want to get into a position of energy dependence on Pakistan.
(This article was written by Tisya Sharma, an Intern at StratNews Global)
