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 reserves in the South American country. The deal, described by Trump as “THE BIGGEST OIL DEAL IN WORLD HISTORY,” was reportedly negotiated by U.S. Secretary of State Marco Rubio, U.S. Secretary of War Pete Hegseth, and Venezuela’s interim President Delcy RodrÃguez.
According to RodrÃguez’s government, the agreement involves the development of 17 oil fields with an estimated potential of 65 billion barrels. The deal is anticipated to attract $100 billion in investments into Venezuela’s oil industry and generate over $209 billion in taxes for Caracas. The agreement stipulates the formation of a new private company in partnership with an undisclosed operator in Venezuela, granted 100-year rights to exploit the oil fields.
Under the terms of the deal, the U.S. will have a 55% effective output in the new private company, which includes ownership rights and the ability to purchase oil at cost. This arrangement would position the company as the second-largest corporate holder of proven reserves globally, following Saudi Aramco.
The announcement of this agreement follows a previous U.S. military operation, directed by Trump, to apprehend former Venezuelan President Nicolás Maduro to face federal charges related to narcoterrorism and drug trafficking. As the conflict in Iran persists and gas prices surge, there is mounting pressure on Trump to address the high gas prices in the U.S.
Although experts caution that a substantial increase in Venezuelan oil production will not be immediate due to the need for significant infrastructure development, the agreement is seen as a strategic move by Trump to encourage American oil companies to return to Venezuela. Despite political uncertainties and historical infrastructure challenges, the potential for increased oil production in Venezuela could have a positive impact on U.S. gas prices.
Darren Woods, CEO of ExxonMobil, expressed reservations about investing in Venezuela, citing concerns about the country’s stability. Nevertheless, Trump has emphasized that his administration has brought stability to Venezuela, aiming to reverse past nationalization policies that impacted American oil companies.
The agreement is expected to bring in billions in private investments to Venezuela, potentially leading to lower gas prices in the U.S., as noted by Rubio. The oil extracted from this partnership will be utilized to replenish the U.S. strategic petroleum reserves and for military purposes. Venezuela holds a substantial portion of the world’s oil reserves, totaling approximately 303 billion barrels, though its current oil production is relatively low due to infrastructure challenges.