U.S. President Donald Trump announced on Friday that his administration has reached a comprehensive agreement with Venezuela that could potentially grant the U.S. access to abundant untapped oil reserves in the South American nation. The deal, if materialized, is set to be one of the largest oil agreements in history.
According to Trump’s social media post, the agreement was brokered by U.S. Secretary of State Marco Rubio, U.S. Secretary of War Pete Hegseth, and Venezuela’s interim President Delcy Rodríguez. The Venezuelan government confirmed that the deal involves the development of 17 fields holding an estimated 65 billion barrels of oil. It is projected that the agreement could attract $100 billion in investment into Venezuela’s oil sector and generate over $209 billion in taxes for Caracas.
As per a U.S. official familiar with the agreement details, the partnership allows the United States to collaborate with an undisclosed private operator in Venezuela to establish a new private entity responsible for managing the reserves. The company is granted 100-year rights by Rodríguez to develop the oil fields.
Under the terms of the deal, the United States will have a 55% effective output share in the newly formed private company, entailing ownership rights and the ability to purchase oil at cost. This arrangement would position the company as the second-largest corporate holder of proven reserves worldwide, following Saudi Aramco.
The announcement of the agreement comes following an operation led by the U.S. military, on Trump’s orders, to apprehend Venezuela’s former president Nicolás Maduro and bring him to the U.S. to face federal charges related to narcoterrorism and drug trafficking.
With escalating gas prices in the U.S. amid the ongoing conflict in Iran and the decrease in Gulf oil flow through the Strait of Hormuz, Trump is facing mounting pressure to address the situation. While the U.S. has tapped into its strategic petroleum reserves, the oil industry faces challenges in swiftly boosting Venezuelan oil production due to the extensive infrastructure repair and expansion requirements.
Encouraging major American oil companies to return to Venezuela could encounter obstacles due to political uncertainties and the considerable infrastructure deterioration over the years. Trump, post-Maduro’s removal, urged oil executives to invest in Venezuela, although some expressed reservations based on past experiences in the country.
Despite skepticism, Trump has emphasized bringing stability to Venezuela through his administration’s efforts. The agreement is perceived as a significant step towards opening Venezuela’s oil sector to privatization and attracting substantial private investments, potentially leading to reduced gas prices in the U.S.
The purchased oil from the new company is designated for replenishing the U.S. strategic petroleum reserve and military utilization. Venezuela boasts one of the largest oil reserves globally, estimated at 303 billion barrels, constituting about 17% of the world’s oil supply. While the reserves in Venezuela are well-known, the country’s oil production remains limited at around 1% of global output due to inadequate infrastructure.
