The White House has offered little detail regarding what President Donald Trump has described as "THE BIGGEST OIL DEAL IN WORLD HISTORY" in Venezuela, beyond a single social media post. Trump said the arrangement announced Friday night would give the United States a stake in Venezuela’s immense oil reserves. It marks a step towards his goal of extracting energy from the country after US forces captured then-President Nicolás Maduro in a late-night raid in January and brought him to New York on federal drug trafficking charges.
Delcy Rodríguez, Venezuela’s acting president, characterised the deal as a move towards economic recovery that will modernise the nation’s energy industry. However, key details remain unclear, including how soon drilling might begin and who will fund the effort. No text of the agreement has been made public.
A look at what is known and what remains uncertain: The U.S. government and an unnamed private operator in Venezuela formed a new private company that was given the rights to vast, untapped oil fields for 100 years. A statement from Rodríguez said the deal involves the development of 17 fields with a proven potential of 65 billion barrels. It said the agreement could draw $100 billion in investment into Venezuela’s oil industry and yield over $209 billion in taxes for Caracas.
Trump said the agreement was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Rodríguez. The deal gives the United States 55 per cent effective output of the new private company, including an ownership stake and rights to buy oil at cost. American purchases of the oil will go toward the U.S. strategic oil reserves along with the military, according to a U.S. official who was not authorized to discuss the matter publicly and spoke on the condition of anonymity.
The company would be the second largest corporate holder of proven reserves after Saudi Aramco, according to the official. Trump says the deal will help lower gas prices for Americans. That is an important objective for the Republican president as the Iran war slows the shipping of Persian Gulf oil and keeps prices elevated months before November elections in the United States.
But experts have repeatedly warned that Venezuela’s dilapidated oil infrastructure will take years and billions of dollars to repair. A substantial boost in production is not expected to happen quickly. The deal could be “helpful in the long run, but 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.
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