Venezuela’s acting President Delcy Rodríguez called the deal a step toward economic recovery and modernization of the country’s oil industry.
Trump’s ‘Biggest Oil Deal’ With Venezuela Raises Questions Over Terms and Gas Prices
Washington: US President Donald Trump has described a new agreement involving Venezuela as the “biggest oil deal in world history,” but the White House has so far provided few details about what the deal actually means.
Trump announced the agreement on Friday, August 28, saying it would give the United States a significant stake in Venezuela’s vast oil resources. The move is part of his broader push to increase American access to Venezuelan energy following the US military operation that captured then-President Nicolás Maduro in January and brought him to New York to face federal drug trafficking charges.
Venezuela’s acting President Delcy Rodríguez, however, has presented the agreement as an opportunity for economic recovery. In a televised address on Sunday, she said the deal would help modernise Venezuela’s struggling oil industry while maintaining the country’s sovereignty.
Rodríguez said Venezuela wanted to become a global energy powerhouse. On Saturday, she said the country’s enormous oil reserves should no longer remain merely a statistic but should be transformed into practical benefits for Venezuelans, including housing.
Yet many important questions remain unanswered. No complete text of the agreement has been publicly released, leaving uncertainty over when oil production could increase, how investments will be financed and exactly how the profits will be divided.
What are the terms of the Venezuela oil deal?
According to Rodríguez, the US government and an unnamed private operator in Venezuela have established a new company that has been granted rights to develop untapped oil fields for 100 years.
The agreement reportedly covers 17 oil fields with a proven potential of 65 billion barrels. Rodríguez said the project could attract around $100 billion in investment into Venezuela’s oil industry and generate more than $209 billion in taxes for the Venezuelan government.
Trump said the agreement was negotiated by Secretary of State Marco Rubio, Defence Secretary Pete Hegseth and Rodríguez.
A US official said the United States would receive an effective 55 per cent share of the new company’s output, including an ownership stake and rights to purchase oil at cost. American purchases would reportedly be directed towards US strategic oil reserves and the military.
The official, who spoke anonymously because they were not authorised to discuss the agreement publicly, said the company could become the second-largest corporate holder of proven oil reserves after Saudi Aramco.
Will the deal reduce US gas prices?
For American motorists hoping for cheaper petrol soon, the answer is probably no.
Trump has argued that increased access to Venezuelan oil could eventually help lower fuel prices. The issue is politically important as the war in Iran has disrupted Persian Gulf oil shipments and kept energy prices elevated ahead of the November elections.
However, Venezuela’s oil industry faces serious infrastructure problems. Much of the country’s production system requires major repairs and investment, meaning additional output is unlikely to arrive quickly.
Amy Myers Jaffe of New York University said the agreement could be useful in the long term but would not affect petrol prices immediately.
The average US gasoline price was around $4.08 per gallon on Saturday, according to AAA, compared with about $3.20 at the same time last year.
Energy analyst Kevin Book said Venezuela has significant potential to increase production. The country has previously produced more than 2.5 million barrels per day above current levels.
But restoring that capacity would require enormous investment and time. “It’s going to take time — many years,” Book said, stressing that projects of this scale cannot produce results overnight.
Trump called the Venezuela agreement the “biggest oil deal in world history.”
The deal reportedly covers 17 oil fields with potential reserves of 65 billion barrels .
Venezuela says the project could attract $100 billion in investment .
Caracas could reportedly receive more than $209 billion in taxes .
The new company would reportedly have 100-year development rights .
The US is expected to receive an effective 55 per cent share of output .
Experts warn that Venezuela’s ageing oil infrastructure needs major investment .
The deal is unlikely to reduce US petrol prices immediately .
Analysts say restoring Venezuela’s production capacity could take many years .