U.S. President Donald Trump announced on Friday a significant agreement between his administration and Venezuela that could potentially grant the U.S. access to abundant untapped oil resources in the South American nation. The deal, touted by Trump as the “BIGGEST OIL DEAL IN WORLD HISTORY,” was reportedly brokered by U.S. Secretary of State Marco Rubio, U.S. Secretary of War Pete Hegseth, and Venezuela’s interim President Delcy Rodríguez.
According to a statement from Rodríguez’s government, the agreement focuses on the development of 17 oil fields with an estimated potential of 65 billion barrels. The deal is anticipated to attract $100 billion in investment into Venezuela’s oil sector and generate over $209 billion in tax revenues for Caracas.
The arrangement permits the United States to collaborate with an undisclosed private operator in Venezuela to establish a new entity responsible for harnessing the oil reserves. As outlined by a confidential U.S. official, Rodríguez has granted the company a 100-year license for the development of the oil fields.
Under the terms of the deal, the U.S. would hold a 55% stake in the new private company, including ownership rights and access to purchasing oil at production cost. This would position the company as the second-largest corporate holder of proven reserves globally, following Saudi Aramco.
The announcement of the agreement comes nearly nine months after a U.S. military operation, directed by Trump, aimed at capturing Venezuela’s former President Nicolás Maduro and bringing him to the U.S. to face charges related to narcoterrorism and drug trafficking.
Amid ongoing tensions with Iran and escalating gas prices in the U.S., Trump is facing mounting pressure to address the situation. The conflict in Iran has disrupted oil flow through the Strait of Hormuz, contributing to the spike in gas prices. The average U.S. gas price currently stands at approximately $4.09 per gallon, significantly higher than the $3.21 per gallon recorded the previous year.
While the oil deal with Venezuela holds the potential to alleviate gas prices in the U.S., experts caution that a rapid increase in oil production is unlikely due to the extensive infrastructure repairs and investments required. Rebuilding the oil sector in Venezuela may encounter challenges due to political uncertainties and decades of neglect in infrastructure development.
Following Maduro’s removal from power, Trump urged oil executives to re-engage with Venezuela during a meeting at the White House. Despite initial interest, industry leaders expressed reservations due to past experiences in the country. CEO of ExxonMobil, Darren Woods, referred to Venezuela as “un-investable” at that time.
Trump has emphasized his administration’s efforts to stabilize Venezuela and has criticized previous nationalization policies that impacted American oil companies. The recent legislation signed by Rodríguez to privatize the oil sector marks a shift from the socialist governance that has characterized Venezuela for over two decades.
The agreement is anticipated to attract substantial private investments into Venezuela and potentially lead to reduced gas prices in the U.S., as highlighted by Rubio. The oil procured from the new company is intended for filling the U.S. strategic petroleum reserve and military purposes.
Venezuela boasts one of the largest oil reserves globally, estimated at 303 billion barrels, constituting about 17% of the world’s oil supply. Despite its vast resources, Venezuela’s oil production remains limited, primarily due to infrastructure challenges, with the country contributing only 1% to global oil output.