Trump's Venezuela Oil Deal: What We Know and What Remains Unclear
The US and Venezuela have struck a deal giving Washington a major stake in the country's oil reserves, but many specifics are still unclear.
President Donald Trump has announced what he calls "THE BIGGEST OIL DEAL IN WORLD HISTORY" with Venezuela, but the White House has released few details beyond a social media post. The agreement, announced Friday night, would give the United States a stake in Venezuela's vast oil reserves, a move that follows the capture of former President Nicolás Maduro in a January raid and his transfer to New York on drug trafficking charges.
Venezuela's acting president, Delcy Rodríguez, described the deal as a step toward economic recovery that will modernize the country's oil industry. However, many questions remain unanswered, including how soon drilling could begin and who will finance the necessary investments. No text of the agreement has been released.
According to a statement from Rodríguez, the deal covers 17 oil fields with a proven potential of 65 billion barrels. It could attract $100 billion in investment and yield over $209 billion in taxes for Caracas. The agreement creates a new private company, formed by the US government and an unnamed private operator, with rights to the fields for 100 years.
Trump said the deal was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Rodríguez. The US will receive 55% of the company's effective output, including an ownership stake and rights to buy oil at cost. American purchases would go toward the US strategic oil reserves and the military, according to a US official who spoke on condition of anonymity. The company would become the second largest corporate holder of proven reserves after Saudi Aramco.
Experts caution that any significant boost in production is unlikely in the near term. Venezuela's oil infrastructure is dilapidated and will require years and billions of dollars to repair. "It's not going to do anything to change the price of gasoline at the retail station for Labor Day weekend," said Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University. The average US gas price stood at about $4.08 a gallon on Saturday, up from $3.20 a year earlier.
Reaction in Venezuela has been mixed. Some see the deal as a betrayal of the long-held principle that the country's resources should benefit its people. Douglas Borjas, a Caracas resident, expressed anger, saying leaders are "clinging to power" by giving away petroleum. Harvard professor Ricardo Hausmann, a former Venezuelan planning minister, called it a "shameful deal," arguing that Rodríguez lacks legitimacy to commit the country to such an agreement.
Many details remain unclear, including the identity of the private operator, the breakdown of the US stake, and who will cover investment costs. Persuading major American oil companies to return could be challenging given political uncertainty and damaged infrastructure. Chevron, the only US oil company actively producing in Venezuela, declined to comment. David Oxley of Capital Economics noted the deal could double US oil reserves and reduce dependence on Canadian and Mexican crude, but he cautioned that logistical hurdles remain and the value of Venezuela's reserves may have been overstated.