President Trump announced a significant oil deal with Venezuela, claiming U.S. majority control over more than 65 billion barrels of proven oil reserves. The agreement, facilitated by Secretary of State Marco Rubio and Secretary of War Pete Hegseth, in coordination with Venezuelan Interim President Delcy Rodriguez, is intended to be at no cost to American taxpayers. The deal involves a new company formed by the U.S. government and an unnamed private operator, which has been granted rights to untapped oil fields for 100 years. This new entity will give the U.S. 55% effective output, including an ownership stake and the right to buy oil at cost. Purchases will bolster the U.S. strategic oil reserves and military supplies.
Venezuelan President Delcy Rodriguez confirmed the 25-year bilateral project will develop 17 strategic oilfields, targeting a production of over 1.5 million barrels per day. She projected the deal could generate approximately $209 billion in revenue for Venezuela, based on a $65 per barrel benchmark, with roughly $19 from each barrel flowing directly to Caracas. Rodriguez emphasized that Venezuela retains sovereignty over its natural resources and that the deal would revive its economy and boost government revenues. It's anticipated to draw $100 billion in investment into Venezuela's oil industry.
However, significant details of the agreement remain opaque. Experts like Amy Myers Jaffe of New York University and Kevin Book of ClearView Energy Partners highlight that the deal's impact on immediate U.S. gasoline prices will be minimal and that repairing Venezuela's dilapidated oil infrastructure will require years and billions of dollars. The identity of the private operator and the breakdown of America's stake are undisclosed, and who will cover the substantial infrastructure investments is unclear. There are also doubts about whether major American oil companies will be eager to invest given political uncertainty and damaged infrastructure, despite Chevron already being in talks to expand its presence.
From a Venezuelan perspective, some view the deal as a betrayal of national sovereignty, with Harvard University professor Ricardo Hausmann, a former Venezuelan planning minister, calling it a "shameful deal." He argues that Interim President Rodriguez lacks the legitimacy to commit Venezuela to such an agreement, and predicts it will not last. David Oxley, chief climate and commodities economist at Capital Economics, suggests the deal could double U.S. oil reserves and reduce dependence on Canadian and Mexican crude, but he cautions about logistical hurdles and potential exaggeration of Venezuela's reserves under former president Hugo Chávez.
