Pakistan stands at a pivotal juncture in its energy journey, where persistent dependence on imported oil and gas collides with the promise of untapped domestic resources.
New discoveries, seismic surveys and growing international interest point to opportunities to reduce import reliance and enhance long-term energy security. At the same time, policymakers and industry leaders are exploring ways to channel investment into local resources while forging global partnerships to unlock this promise.
As of December 2024, Pakistan’s proven oil reserves were at approximately 238 million barrels, representing a 23% increase from around 193 million barrels in December 2023.
Though modest by global standards, the rise highlights the country’s latent potential and the need for sustained investment in domestic exploration. Despite this encouraging rise, domestic production still falls short of meeting national demand, leaving Pakistan heavily reliant on imports to fuel its industries, transport and households.
The cost of this reliance is steep. In FY2023–24, Pakistan’s petroleum import bill reached US$15.16 billion, according to the State Bank of Pakistan, with some estimates placing it as high as $16.91 billion.
This ongoing outflow of foreign exchange underscores why developing local reserves remain an urgent priority. Every barrel produced domestically represents not just a saving in import costs but also is a step toward greater national resilience.
Beyond conventional oil and gas, Pakistan ranks among the world’s most promising nations in terms of shale energy potential. According to the US Energy Information Administration (EIA), Pakistan may hold up to 9 billion barrels of technically recoverable shale oil and around 105 trillion cubic feet of shale gas, mostly in the Sembar and Ranikot formations of the Lower Indus Basin. If developed, these resources could transform Pakistan’s energy landscape.
However, these figures represent geological potential, not proven reserves. Unlocking them would require substantial drilling, advanced technologies and a carefully phased development strategy. Industry estimates suggest a minimum $5 billion initial investment and several years of groundwork would be needed before commercial-scale extraction is viable.
This challenge, though formidable, presents an opportunity. Pakistan could leverage partnerships with technologically advanced countries and multinational energy firms to access the expertise, capital and innovation required to realize these untapped resources. Positioning itself as a favorable investment destination could set the stage for a major energy sector transformation.
The Pakistan-US investment relationship remains underutilized, particularly in sectors such as energy, IT, agriculture, and minerals. Pakistan’s mineral wealth—valued between $6–8 trillion—includes copper, lithium, and rare earths, which are critical to the US clean energy transition and technological competitiveness.
The Special Investment Facilitation Council (SIFC) has played a key role in streamlining procedures and encouraging investment, especially in renewables and mining. Expanding US FDI in energy and minerals is not just economically sound—it’s strategically imperative for both nations.
Momentum is also building offshore. A multi-year seismic survey in early 2024 identified promising hydrocarbon structures in the offshore Indus Basin.
Although early-stage, these findings suggest Pakistan’s coastal regions may hold the key to future discoveries. Successful offshore exploration would not only diversify the energy mix but also elevate Pakistan’s role as a serious player in the global energy markets.
These developments highlight that Pakistan is not resource-poor—it is resource-underdeveloped. With the right strategy and partnerships, the country could convert geological promise into economic strength, supporting industrial growth, job creation and balance-of-payments stability.
Energy development must be viewed in the broader context of international partnerships. Since achieving independence in 1947, Pakistan’s relations with the US have weathered geopolitical shifts, yet maintained resilient trade and investment. Today, the U.S. remains Pakistan’s largest export market—accounting for around 17% of exports—and a key source of FDI.
American firms have invested in Pakistan’s consumer goods, ICT, renewables and financial services, bringing global expertise while creating local opportunities. In return, Pakistan exports textiles, apparel and a growing array of goods, making the US-Pakistan bilateral trade corridor one of South Asia’s most important.
In July–August 2025, high-level talks led to a new trade agreement focused on developing Pakistan’s oil reserves and reducing bilateral tariffs. The pact aims to deepen cooperation in hydrocarbons and expand market access for Pakistani exports.
US President Donald Trump even suggested future exploration could position Pakistan as a regional energy exporter—an ambitious yet symbolic endorsement of Pakistan’s potential.
Pakistan’s energy challenge is real—but so too is its potential. With rising proven reserves, vast shale prospects and promising offshore surveys, the nation stands on the cusp of transformation. Reform, innovation and foreign investment will be key to turning that promise into performance.
For partners like the US, deeper engagement in Pakistan’s energy sector is both a strategic and economic opportunity that could help undergird regional stability. If managed effectively, Pakistan could shift from chronic energy dependence to become a resilient, self-sufficient player in the global energy market.
Abubakar Iqbal Sheikh works at a multinational oil and gas drilling company.
