U.S. Strikes Significant Oil Deal with Venezuela

Washington (AP) — President Donald Trump announced a notable agreement with Venezuela on Friday. If executed, this could provide the U.S. with access to large oil reserves in the South American country, at production cost. Trump highlighted on social media that Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Venezuela’s acting President Delcy Rodríguez brokered the deal.

The United States of America has just entered into an Agreement with the Country of Venezuela on, THE BIGGEST OIL DEAL IN WORLD HISTORY! Trump wrote.

In a statement, Rodríguez’s government confirmed the agreement involves 17 oil fields, boasting a proven capacity of 65 billion barrels. This initiative could bring $100 billion in investment to Venezuela’s oil industry, generating over $209 billion in taxes for Caracas. On Telegram, Rodríguez stated the agreement could significantly aid the country’s economic recovery.

Details of the Agreement

The deal permits the U.S. to join forces with a private Venezuelan operator to establish a new company that would manage the reserves. An anonymous U.S. official shared that Rodríguez granted 100-year development rights for these oil fields. The deal stipulates the U.S. will receive 55% of the company’s output, including ownership and the right to purchase oil at cost. The company would rank as the second-largest holder of proven reserves after Saudi Aramco.

President Trump’s move comes as he faces pressure to reduce oil prices. The ongoing conflict in Iran and reduced Gulf oil passage through the Strait of Hormuz have impacted global oil distribution. Gas prices in the U.S. have risen to around $4.09 per gallon, compared to $3.21 the previous year. However, experts caution that Venezuelan oil production growth will not be immediate due to outdated infrastructure and political instability.

Challenges and Industry Reactions

Following the removal of Nicolás Maduro, Trump met with oil executives, urging them to return to Venezuela. While interested, executives were cautious due to past difficulties in the region. Darren Woods, CEO of ExxonMobil, described the country as “un-investable” then.

Trump claims his administration has stabilized Venezuela, previously seizing U.S. assets when former President Hugo Chávez nationalized foreign-owned properties. After taking power, Rodríguez legalized oil sector privatization, changing a fundamental policy of the socialist government.

Rubio stated on social media that the agreement would attract substantial private investment to Venezuela and lower U.S. gas prices. Oil procured from the new company will replenish the U.S. strategic petroleum reserve and support military use.

With 303 billion barrels of crude, Venezuela holds around 17% of the world’s reserves, as per the U.S. Energy Information Administration. Despite this, the nation produces only about 1% of global oil due to poor infrastructure. Former President Maduro remains in U.S. custody, facing federal charges.