Trump announces ‘deal’ with Islamabad to develop Pakistan’s oil reserves: ‘Maybe they’ll sell to India someday’
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Trump announces ‘deal’ with Islamabad to develop Pakistan’s oil reserves: ‘Maybe they’ll sell to India someday’
The US President announced a 25 per cent tariff on India’s oil imports from Russia. He also said that Pakistan and the U.S. would work together to develop the country’s oil reserves. India is the world’s third-largest consumer of crude oil and relies on imports for around 88 per cent of its needs. The announcement comes as Washington and New Delhi continue to negotiate a peace deal between the two countries. The deal is expected to be announced in the next few days, but a final agreement is not expected until at least the end of the month, if not later. The US and India are also negotiating a deal to end the conflict in the South China Sea, which has claimed the lives of more than 1,000 people since the start of the year. The United States is also expected to announce a deal with South Korea to end a dispute over the sale of military equipment to the South Korean government. The talks are expected to take place in the coming days, and a deal could be announced as early as next week.
“We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves. We are in the process of choosing the Oil Company that will lead this Partnership. Who knows, maybe they’ll be selling Oil to India some day!” Trump said in a post on Truth Social.
India is the world’s third-largest consumer of crude oil and depends on imports to meet around 88 per cent of its requirement of the commodity. Pakistan is also heavily reliant on energy imports, with little domestic crude oil production. Currently, Russia is India’s biggest source of oil with a share of around 40 per cent in India’s crude oil imports, followed by West Asian majors like Iraq, Saudi Arabia, and the United Arab Emirates. The US is also among the top five suppliers of crude oil to India.
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Over the past few weeks, Trump has been saying that Russia’s trade partners will be slapped with hefty secondary tariffs from the US, something that experts see as part of his effort to force Moscow to end the Russia-Ukraine war.
Hours before his post announcing the “deal” with Pakistan, Trump announced a 25 per cent tariff on Indian goods from August 1, with an additional but unspecified “penalty” for India’s energy and defence imports from Russia, even as Washington and New Delhi are in the midst of negotiating a trade deal. Trump’s announcements also come amid heightened tension between India and Pakistan following a military conflagration between the South Asian neighbours in May due to the Pahalgam terror attack by Pakistan-backed terrorists. Trump has repeatedly claimed that he brokered the ceasefire between New Delhi and Pakistan, while India has maintained that there was no mediation by any other country.
“Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country. Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST,” Trump posted on Truth Social.
Though the US President did not specify the rate of penalty for India on account of Russian oil and defence imports, earlier statements made by Trump indicate that it could be to the tune of 100 per cent. Trump on Monday had cut short a deadline for Moscow to make progress toward a Ukraine war peace deal or see its oil customers slapped with secondary tariffs of 100 per cent in 10-12 days. “So I think anyone who buys sanctioned Russian oil should be ready for this,” US Treasury Secretary Scott Bessent had said.
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Given how talks between Indian and American negotiators have proceeded, an interim deal still seems distant and is unlikely to be clinched before September, with October a possible outer deadline. Indications are a sixth round of talks between the two negotiating teams will take discussions forward in August. For New Delhi, a tariff of 25 per cent is bad news, but something that policy circles seem to have already factored in. This rate essentially means going back to nearly the reciprocal tariff level, which was 26 per cent.
However, the penalty implies an additional setback for India. The resolve from the Indian side would be to push the interim deal in the meantime, to ensure that Indian goods manage a discounted headline tariff, as has been wrangled by other countries that have struck a deal over the last couple of weeks.
In his post that mentioned the oil deal with Pakistan, Trump also said that the White House was very busy working on trade deals, and he had spoken to leaders of many countries, “all of whom want to make the United States “extremely happy”.
“I will be meeting with the South Korean Trade Delegation this afternoon. South Korea is right now at a 25% Tariff, but they have an offer to buy down those Tariffs. I will be interested in hearing what that offer is… Likewise, other Countries are making offers for a Tariff reduction. All of this will help reduce our Trade Deficit in a very major way. A full report will be released at the appropriate time” Trump said.
Source: https://indianexpress.com/article/business/trump-announces-us-oil-deal-with-pakistan-10160290/