Washington: US President Donald Trump has announced what he described as the “biggest oil deal in world history” with Venezuela, saying the agreement gives the United States majority control over more than 65 billion barrels of Venezuela’s proven oil reserves.
Trump announced the agreement on Friday, August 28, saying it had been negotiated by US Secretary of State Marco Rubio, Secretary of War Pete Hegseth and Venezuela’s interim President Delcy Rodríguez.
Trump Says US Will Control 65 Billion Barrels
In announcing the agreement, Trump said the United States had secured majority control of more than 65 billion barrels of proven Venezuelan oil reserves through a partnership involving private businesses.
Trump also claimed that the arrangement would come at no cost to American taxpayers. The agreement is intended to give US companies a major role in developing Venezuela’s oil resources while helping increase crude supplies available to the American market.
Venezuela possesses the world’s largest proven oil reserves, making the agreement strategically significant for both countries.
Deal Covers 17 Venezuelan Oil Fields
According to the Venezuelan government, the agreement involves the development of 17 oil fields with a combined proven potential of around 65 billion barrels.
The plan could attract approximately $100 billion in private investment into Venezuela’s oil sector, while Caracas has projected more than $209 billion in tax revenues from the development.
The agreement is expected to focus on increasing production from Venezuela’s major oil-producing regions, including the Orinoco Belt and Lake Maracaibo.
US Companies To Get Major Operational Role
Under the proposed structure, US companies are expected to receive extensive rights to develop and operate oil fields.
The Associated Press reported that a new company would be created to develop the fields, with the US side holding a 55% operational share. The United States would also purchase oil at cost, with some of the supply intended to support America’s Strategic Petroleum Reserve and domestic energy needs.
The arrangement represents a major shift in Venezuela’s traditionally state-controlled oil sector.
Why Is Venezuela’s Oil So Important?
Venezuela holds enormous petroleum resources but has struggled to translate its reserves into production because of years of underinvestment, infrastructure problems, political instability and sanctions.
Despite possessing some of the world’s largest proven reserves, Venezuela’s current oil output remains far below its historical production levels.
The Trump administration believes increased investment and improved infrastructure could significantly raise Venezuelan crude production over time. However, industry executives and analysts have warned that rebuilding the country’s oil sector could take years and require substantial investment.
Trump Wants Lower US Fuel Prices
The announcement also comes as the Trump administration faces pressure over elevated US fuel prices.
The White House has argued that increasing access to Venezuelan crude could strengthen US energy supplies and eventually help reduce gasoline prices.
The agreement could also help Washington replenish the Strategic Petroleum Reserve, while giving American energy companies access to one of the world’s largest untapped petroleum resources.
Venezuela Expects Major Economic Benefits
For Caracas, the agreement could provide a significant source of investment and government revenue.
Venezuelan officials say the planned development could generate around $100 billion in investment and more than $209 billion in taxes, potentially providing a major boost to the country’s struggling economy.
The deal also signals Venezuela’s increasing willingness to open its energy sector to foreign investment after decades of strong state control.
Questions Remain Over Implementation
Despite Trump’s description of the agreement as historic, several details of the arrangement remain unclear.
Experts have questioned how quickly new investment can translate into higher production, given Venezuela’s ageing infrastructure, damaged oil facilities, lack of investment and complicated legal environment.
There are also questions over the precise legal structure of the agreements and how ownership and operational rights will work in practice.
A Major Shift In US-Venezuela Relations
The oil agreement marks a dramatic change in the relationship between Washington and Caracas.
For decades, Venezuela and the United States have been locked in political and economic disputes, particularly over Venezuela’s oil industry and its government.
The new arrangement could potentially transform the country’s energy sector while giving US companies a much larger presence in Venezuela.
For Trump, the deal represents an opportunity to increase US access to energy resources and potentially lower fuel costs. For Venezuela, it offers the prospect of billions of dollars in investment and government revenue.
Whether the agreement ultimately delivers the scale of production and economic benefits promised by both sides will depend on how quickly investment, infrastructure development and oil-field operations can be implemented.
