A New Energy Agreement with Venezuela
President Donald Trump announced Friday that his administration has entered a sweeping agreement with Venezuela. This pact could grant the United States access to 65 billion barrels of untapped oil reserves. These reserves are located within 17 specific fields across the South American country. The deal aims to secure long-term energy rights for American interests at cost.
Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Venezuela's acting President Delcy Rodríguez negotiated the terms. Trump described the arrangement as the largest oil deal in history. Government statements from Caracas indicate the agreement could draw $100 billion in direct investment into the nation's oil sector. Projections suggest the deal might generate over $209 billion in tax revenue for Venezuela.
Structure and Terms of the Arrangement
A U.S. official familiar with the negotiations provided details on the underlying structure. The agreement allows the United States to partner with an unnamed private operator to create a new, separate company. This entity will manage the extraction of the reserves. Rodríguez reportedly granted this company 100-year rights to develop the oil fields.
The United States holds a 55% effective output stake in this new venture. This includes both an ownership position and specific contractual rights to purchase crude oil at cost. According to the same U.S. official, this new company would rank as the second-largest corporate holder of proven reserves globally. Only Saudi Aramco would exceed its holdings.
Context of Economic and Political Pressure
Trump faces significant domestic pressure to lower fuel prices. The average price of gasoline in the United States reached $4.09 a gallon on Friday. This represents a steep increase from the $3.21 average recorded one year ago. The administration has relied on the strategic petroleum reserve to manage supply, but levels have dropped by more than 100 million barrels since the start of 2026.
Global supply chains face further strain from the war in Iran. The conflict has stalled movement through the Strait of Hormuz. This waterway previously carried about 20% of the world's petroleum. The U.S. government maintains that this new deal with Venezuela serves as a necessary step to stabilize domestic energy needs while moving away from reliance on Middle Eastern shipping routes.
Hurdles for Future Production
Infrastructure in Venezuela remains in a state of severe disrepair. Experts warn that production capacity will not increase immediately. Repairing the oil fields requires billions of dollars and many years of labor. Large American oil companies have expressed caution despite the administration's push to return to the region. ExxonMobil CEO Darren Woods previously characterized the country as un-investable due to these systemic issues.
President Trump defends the deal by noting his administration's role in the ouster of Nicolás Maduro. Maduro was captured by the U.S. military nine months ago and currently sits in a U.S. jail facing drug trafficking charges. Acting President Rodríguez has already signed legislation to open the oil sector to privatization. This move represents a sharp departure from the policies of the previous socialist administration. The success of this deal now hinges on whether private industry can overcome the years of neglect that have left Venezuela’s oil fields producing only 1% of global supply.