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 nation at advantageous terms. The deal, said to be brokered by U.S. Secretary of State Marco Rubio, U.S. Secretary of War Pete Hegseth, and Venezuela’s interim President Delcy RodrÃguez, involves the development of 17 oil fields with a combined estimated potential of 65 billion barrels.
According to a statement from RodrÃguez’s administration, the agreement has the potential to attract $100 billion in investment to Venezuela’s oil sector and generate over $209 billion in tax revenue for Caracas. The deal allows for the formation of a new private company in partnership with a confidential operator in Venezuela, with the company being granted 100-year rights to develop the oil fields.
Under the terms of the agreement, the United States would hold a significant stake of 55% in the new company, including ownership rights and the ability to purchase oil at cost. This move would position the company as the second-largest holder of proven reserves after Saudi Aramco. The agreement follows a previous U.S. military operation, authorized by President Trump, aimed at capturing then-President Nicolás Maduro of Venezuela to face charges related to narcoterrorism and drug trafficking.
As the conflict with Iran continues, resulting in disruptions in Gulf oil flow, the U.S. is facing heightened pressure to address rising gas prices. Despite tapping into its strategic petroleum reserves, the U.S. is seeing a decline in reserves, which has contributed to the current average gas price of $4.09 per gallon, up from $3.21 a year ago.
Although the oil deal with Venezuela could potentially alleviate gas prices in the long term, experts caution that significant increases in oil production will take time due to the need for extensive infrastructure repairs and investments. Convincing major U.S. oil companies to return to Venezuela may also face challenges due to political uncertainties and decades of infrastructure neglect.
President Trump has expressed a desire for American oil companies to reenter the Venezuelan market, emphasizing the stability his administration has brought to the region. The new agreement, aimed at privatizing Venezuela’s oil sector, is expected to attract substantial private investments and potentially lower gas prices in the United States.