President Donald Trump announced what he called a historic Trump Venezuela Oil Deal, giving the U.S. majority control of more than 65 billion barrels of Venezuela’s proven oil reserves through a partnership with private business. The announcement is a major shift in the relationship between Washington and Caracas, and could transform Venezuela’s battered energy industry.
Trump said the deal was negotiated by Secretary of State Marco Rubio and Defense Secretary Pete Hegseth in cooperation with Venezuela’s interim President Delcy Rodriguez. In a social media post, Trump called it “the biggest oil deal in world history” and said it would come at no cost to American taxpayers. Trump has recently come under increasing pressure to reduce domestic petrol prices that soared after the conflict with Iran.
Under the arrangement, the United States would secure a majority position in a new private company involved in developing 17 Venezuelan oil fields. CNN reports that the negotiated Trump Venezuela oil deal would give the United States “55% effective output of a new private joint venture that will be the second-largest private oil company by reserves in the world.” The official also said the arrangement could give the company 100-year rights to develop the fields.
The reserves we are talking about are quite large. Venezuela has proven crude oil reserves of more than 300 billion barrels, the largest known reserves in the world, according to the U.S. Energy Information Administration. The new oil giant is expected to be valued at around 65 billion barrels of coverage and more than half its value has been secured by the US government through a mix of equity ownership and guarantyd at-cost oil offtake.
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The Trump Venezuela oil deal is happening while Americans are paying high prices for fuel. The president says increased Venezuelan oil production will eventually increase supplies and help reduce gasoline prices. But the deal could face legal and constitutional hurdles in Venezuela, where critics may ask whether the interim government has the power to confer long-term control over the country’s national oil resources without the approval of the country’s legislature or other constitutional institutions.
“The Trump Venezuela oil deal is a huge win for both countries,” said Rubio. “It will bring in nearly $100 billion in private investment and create thousands of jobs in Venezuela. But whether the deal can be implemented may depend on rulings by courts, political negotiations, and the legal status of the companies involved. Any challenge would delay investment, complicate the transfer of control, and increase the uncertainty that future Venezuelan governments would recognize the arrangement.
“The Trump Venezuela Oil Deal has also been embraced by the Venezuelan government, which says investment in the oil sector could help revive the country’s struggling economy and increase government revenue. Caracas officials said the development of the 17 fields could generate more than $209 billion in taxes for the Venezuelan government.
But the immediate impact on oil production and the price of gasoline is unclear. After the military operation, Trump said American companies would help rebuild Venezuela’s oil industry, which has been plagued by years of underinvestment, crumbling infrastructure, and falling production.
But political uncertainty could scare off major international companies from putting capital into the country. Experts in the industry say that to revive Venezuela’s productive capacity, it would require huge investment and years to do so.
The precise outline of the Trump Venezuela oil deal also remains only partially public. While the administration has highlighted the agreement’s huge reserve base and economic potential, several details about the companies involved, individual oil fields, and the implementation process remain undisclosed.
The Trump Venezuela oil deal could become one of the most significant developments in Venezuela’s oil industry in decades if it is successfully executed. The deal follows a change in the law approved by Venezuelan lawmakers and supported by interim President Delcy Rodriguez on January 3rd to ease the way for foreign companies to invest and operate in the country’s energy sector. The move could help attract foreign capital, accelerate the development of oil fields, and give Washington a powerful new foothold in one of the world’s richest petroleum regions.