Trump Administration Announces Deal Giving US Stake in Venezuela’s Oil Reserves

The Trump administration has announced an agreement under which the United States would gain majority control of a joint venture to develop 17 Venezuelan oil fields holding an estimated 65 billion barrels of reserves. President Trump called it a “historic” deal that would more than double US oil reserves and lower gas prices, but analysts note the deal’s vague terms, the difficulty of extracting Venezuela’s mostly extra-heavy crude, and Venezuela’s history of reneging on oil agreements make near-term impact uncertain.

What exactly was agreed?

According to details relayed by Venezuela’s interim President Delcy Rodríguez and a US official speaking to CBS News, the deal creates a joint venture in which the US government would hold 55% control alongside an “experienced private operator” in Venezuela. Rodríguez said the venture was granted a 100-year concession to operate the 17 fields, while she separately described the overall energy agreement as lasting 25 years — a discrepancy that has not been resolved in public statements. The deal calls for more than $100 billion in private investment and a target of $209 billion in tax revenue for Venezuela, with an initial production goal of 1.5 million barrels per day, according to Rodríguez.

Secretary of State Marco Rubio and Defense Secretary Pete Hegseth are credited with negotiating the agreement with Venezuela’s leadership through what Trump described as a partnership with private business, struck “at no cost to the American Taxpayer.” Trump has pushed for access to Venezuela’s reserves — the largest proven reserves in the world — since the US captured then-President Nicolás Maduro in January to face drug trafficking charges in New York. Rodríguez, Maduro’s former vice president, was subsequently backed by Washington and has framed the deal as preserving Venezuelan sovereignty over its natural resources while reviving its economy.

Can Venezuela actually produce that much oil?

Energy analysts writing in Forbes caution that the headline reserve figure is misleading because most of the oil is extra-heavy crude, which is far more costly and slow to extract than conventional oil. Typical conventional fields produce 8-12% of their reserves annually, while heavy oil sands — as seen in Canada — are produced at under 1% a year. Applying that comparison to Venezuela suggests realistic production of around 1.5 to 2 million barrels per day, not the tens of millions the raw reserve number might imply. That would roughly triple Venezuela’s current output but remain below production levels seen before Hugo Chávez’s mismanagement and mass layoffs at the state oil company gutted the industry.

One analyst points to Chevron’s 1995 agreement to add just 35,000 barrels a day of capacity at the Boscan heavy oil field, which required roughly $2 billion in spending over 20 to 30 years — illustrating how capital-intensive and slow heavy-oil development can be, even adjusted for inflation.

Will this lower gas prices at the pump?

Not immediately, according to Forbes analysis, even though Trump has cited lowering gas prices as a key justification for the deal. Trump has faced domestic political pressure over pump prices, which rose amid the Iran war, but commentators note that new Venezuelan production would take years to materialize given the investment and infrastructure required, meaning any price effect is a long-term prospect at best rather than a near-term fix.

What are the risks to investors and to the deal itself?

The biggest risk flagged by analysts is political: Venezuela’s government has a history of altering or nationalizing oil agreements after they’ve been signed, and the country’s political situation remains unstable following Maduro’s removal. Analysts describe a best-case scenario involving durable production-sharing arrangements and steady investment, versus a worst-case scenario in which a future Venezuelan government renationalizes the fields or rewrites the terms, leaving private investors with major losses. There’s also uncertainty around the proposed “cost” payment structure for investors and conflicting public statements about how long the arrangement is meant to last. Analysts argue that strong, enforceable contracts will be essential to protect the investment given this history.

How is “US control” being interpreted?

Coverage differs on how much authority the deal actually gives Washington. The BBC describes it as apparently granting the US direct governance over a foreign country’s sovereign resources, wider in scope than typical energy partnerships. Forbes analysis pushes back on the “control” framing, arguing the US will not “take” the oil outright, that Venezuelan sovereignty over the resource legally persists, and that it remains unclear exactly who will handle field development and redevelopment on the ground.

Why this deal is being watched closely

Venezuela holds the world’s largest proven oil reserves, but decades of mismanagement, US sanctions, and underinvestment have left output far below its historical peak. A deal of this scale — if it holds — would mark one of the largest foreign investments in Venezuela’s oil sector in years and reshape US-Venezuela relations following Maduro’s removal from power. But the gap between the administration’s framing of a done deal and the sparse operational details so far reported means the agreement’s real-world impact on production, investment, and consumer prices remains largely unproven.

Sources

• Forbes — The U.S. Takes Control Of Venezuelan Oil—Sort Of · What U.S.-Venezuela Oil Deal Is — And Is Not — About · How To Manipulate The Oil Market For Profit
• BBC Business

Featured photo: Wilfredor via Wikimedia Commons (CC0)