Trump said Pakistan could sell oil to India. Here’s the truth

As if the 25% trade tariffs and additional penalties weren’t enough, US President Donald Trump on July 30 took another jab at India by saying that Washington, DC would partner with Pakistan to develop its “massive oil reserves”, adding, “Who knows, maybe they’ll [Pakistan] be selling oil to India someday!”Trump’s announcement on Truth Social — that the US and Pakistan are in the process of selecting an oil company to lead the effort — has fuelled speculation and debate over the true scale of Pakistan’s energy resources. The truth is that Pakistan’s proven oil and gas reserves are minimal, projected to last less than two years, and the country relies on imports from West Asia for about 85% of its energy needs.Although the country has long claimed to have large oil deposits along its coast, no progress has been made to tap the same, with industry experts cautioning that such formations do not meet global standards for “reserves”, which require proven resources, economic feasibility, and a defined development plan. Analysts also highlight numerous barriers to energy development in Pakistan, including a low exploration success rate, political instability, financial uncertainty, and serious security challenges. On top of that, Pakistan’s refining infrastructure is outdated and inadequate to support large-scale production or export.So, how much oil does Pakistan have at present? Just enough for two yearsAccording to the US Energy Information Administration (EIA) and Worldometer data, Pakistan had 353.5 million barrels of proven and recoverable oil reserves as of 2016, placing it 52nd globally and accounting for just 0.021% of the world’s total reserves.At current consumption levels (about 556,000 barrels per day), these reserves would cover less than two years of domestic demand without imports or new discoveries.In contrast, India boasts 651.8 million metric tons of recoverable crude oil reserves and 1,138.6 billion cubic metres of natural gas reserves within its sedimentary basins, which are expected to last it for 20 and 30 years, respectively.Additionally, India ranks among the top five refining nations globally – after China, the US and Russia – thanks to its robust infrastructure and strategic geographic location and the seventh-largest exporter of refined petroleum products. Pak does not have even strategic reservesAt present, Pakistan does not have any strategic oil and gas reserves.A strategic oil reserve is an emergency stockpile of crude oil and gas maintained by governments to mitigate the impact of supply disruptions and ensure energy security. These reserves are designed to cushion the economy during periods of high prices or when supplies are threatened. This capacity is managed by Indian Strategic Petroleum Reserve Limited (ISPRL), a special purpose vehicle under the ministry of petroleum & natural gas.The total capacity was estimated to provide for about 9.5 days of crude oil requirement, as per the 2019-20 consumption pattern. Besides, oil marketing companies have storage facilities for crude oil and petroleum products for 64.5 days, taking the current total national capacity for storage of crude oil and petroleum products to 74 days.Large oil deposits – only on paperTrump’s remarks likely stem from recent seismic surveys in Pakistan’s Offshore Indus Basin, which identified large underwater structures with potential oil and gas signatures.The findings from these surveys – probably conducted by the US Energy Information Administration – prompted speculation that these deposits could rank among the world’s top four reserves, after Venezuela, Saudi Arabia, and Iran. However, no exploratory drilling has confirmed these findings. Additionally, Pakistan has yet to achieve any successful offshore extraction, and past efforts like the Kekra-1 well (in deep sea off the Karachi coast) have failed. Trump’s boast is easier said than doneDeveloping Pakistan’s offshore oil potential could cost $5 billion and take 4–5 years just to confirm and begin production. Infrastructure needs—pipelines, refineries, and ports—would require even more investment. Pakistan’s economic challenges, including $126 billion in external debt and a $17.5 billion energy import bill (2023), further complicate the outlook.Another factor is Pakistan’s limited refining capacity, which currently stands at 450,000 bpd, (20 million mt/year). However, actual capacity utilization is only around 10 million mt, according to S&P Global. This is mainly due to the decline in fuel oil demand in the country following the change in energy demand patterns for the power sector.A potential US entry into Pakistan’s oil sector may also strain Islamabad’s ties with China, which has invested heavily in the country through the China-Pakistan Economic Corridor (CPEC). Many CPEC projects, including energy and port infrastructure, are in Balochistan — a region rich in resources but plagued by a long-running insurgency and opposition to federal control.A US-Pakistan oil partnership in Balochistan could strain ties with China and face serious security risks, as local armed groups have repeatedly attacked Chinese workers and state infrastructure — raising concerns over the viability of any major foreign-led energy project.Trump’s proposed oil venture with Pakistan has drawn attention to a nation largely absent from global energy conversations. Without confirmed drilling results, Pakistan’s oil prospects remain, at this juncture, mere speculation.With inputs from ET Online and agencies