U.S. President Donald Trump announced on Friday a significant agreement with Venezuela that could potentially grant the U.S. access to abundant untapped oil reserves in the South American nation at a favorable cost. The deal, facilitated by U.S. Secretary of State Marco Rubio, U.S. Secretary of War Pete Hegseth, and Venezuela’s interim President Delcy Rodríguez, involves the development of 17 fields holding an estimated 65 billion barrels of oil.
According to Rodríguez’s government, the agreement is projected to attract $100 billion in investments to Venezuela’s oil sector, generating over $209 billion in tax revenues for Caracas. The partnership allows the United States to collaborate with an undisclosed private operator in Venezuela to establish a new private entity to manage the reserves. The company is granted 100-year rights by Rodríguez to develop the oil fields, with the U.S. securing a 55% effective output share, including ownership rights and access to oil at cost.
The announcement of the deal follows a previous U.S. military operation directed by Trump to apprehend former Venezuelan President Nicolás Maduro for federal narcoterrorism and drug trafficking charges. As gas prices in the U.S. remain high amid ongoing tensions in Iran, with the strategic petroleum reserves falling below 300 million barrels, the agreement aims to alleviate economic pressures on the country. However, experts caution that a substantial increase in Venezuelan oil production will take time and substantial investment due to extensive infrastructure repairs needed.
Trump’s push for American oil companies to re-engage in Venezuela post-Maduro’s removal has met with cautious interest from industry leaders. Despite the potential opportunities, concerns over political uncertainties and deteriorated infrastructure in the region pose challenges to immediate investment returns. The agreement is seen as a strategic move by the Trump administration to secure access to Venezuela’s vast oil reserves and stabilize oil prices in the U.S.
Rodríguez’s decision to open Venezuela’s oil sector to privatization marks a significant shift from the country’s previous socialist policies, aiming to attract foreign investments and boost oil production. The deal is expected to benefit both American and Venezuelan economies, with potential impacts on gas prices in the U.S. The purchased oil from the new company will be utilized for filling the U.S. strategic petroleum reserve and military purposes.
Venezuela, known for its substantial oil wealth, holds approximately 303 billion barrels of crude oil reserves, accounting for a significant portion of the global supply. Despite its vast resources, the country’s oil production remains minimal due to infrastructure challenges. The agreement signals a new chapter in the U.S.-Venezuela oil relations, aiming to leverage Venezuela’s oil potential for mutual economic benefits.