Trump’s energy pact with Pakistan carries risks for US firms

New Delhi, Aug 18 (IANS) President Donald Trump’s announcement of a new US-Pakistan deal to jointly develop Pakistan’s oil reserves has added more complexity into South Asian geopolitics as the deal carries implications far beyond its stated aim of energy development.

Despite Trump’s reference to “massive oil reserves,” Pakistan’s conventional crude output remains modest by global standards. The country’s proven reserves stand at roughly 238 million barrels, a sliver compared to Middle Eastern producers.

Where Pakistan’s real promise lies is in its natural gas wealth (an estimated 18 trillion cubic feet) and technically recoverable shale oil deposits, pegged at about 9 billion barrels, concentrated largely in Balochistan’s under-explored basins.

Balochistan, however, is both an energy frontier and a political tinderbox. The province hosts vast mineral deposits — copper, gold, and chromite among them — and is crisscrossed by energy infrastructure linked to the China-Pakistan Economic Corridor (CPEC). It is also home to a decades-long insurgency, with groups like the Baloch Liberation Army targeting pipelines, mines, and foreign contractors.

Any US-led oil and gas project here would, therefore, be as much a test of Islamabad’s internal security capacity as it would be of its resource potential, according to an article by retired IAS officer KBS Sidhu.

The article highlights the risks involved in strife-torn Balochistan, if US energy majors move into the province. The region already hosts Chinese-backed projects under CPEC and is strategically linked to Gwadar Port, China’s Arabian Sea outlet. However, insurgent activity has repeatedly disrupted projects, targeting foreign workers and energy installations alike.

For the Baloch nationalist movement, U.S.-led resource development could become another rallying point against what they perceive as external exploitation. Washington’s involvement will thus carry not only commercial risks but also broader geopolitical reverberations, potentially complicating both China’s and Pakistan’s plans for the province.

This new US-Pakistan energy partnership signals that Washington is ready to engage Islamabad in ways that bypass traditional military aid frameworks, using commerce and investment as entry points, the author observes.

The article further states that going forward, India’s foreign policy will need to account for this evolving triangle. Maintaining momentum in Indo-US defence and technology ties, hedging on energy diversification, and using its negotiating leverage to neutralise tariffs will be essential. The broader trajectory of US-India relations may now hinge on how deftly New Delhi can both manage Trump’s transactionalism and ensure that any new American footprint in Pakistan is shaped in ways that ultimately reinforce, rather than undercut, India’s strategic standing in the region.

In sum, Trump’s oil deal is more than a headline — it is a stress test for India’s ability to blend hard-nosed trade bargaining with big-picture diplomacy in a rapidly shifting regional order, the article added.

–IANS

sps/na