New details are emerging about the US-Venezuela oil agreement that President Trump has called "the largest oil deal in world history." Trump stated the arrangement, announced last Friday evening, will give the United States a stake in Venezuela's vast petroleum reserves. Meanwhile, Venezuela's acting president, Delcy Rodríguez, described the deal as a step toward economic recovery and the modernization of the nation's oil sector.
However, this unprecedented arrangement is fraught with uncertainty regarding its legality, execution prospects, and political durability. Reactions in the US are sharply divided along party lines, and the deal has sparked strong domestic opposition within Venezuela.
Terms of the Agreement
On Monday evening, the White House issued a fact sheet detailing the agreement. According to this information, Venezuela's interim government has granted the private firm North America Blue Energy Partners (NABEP) 100-year concession rights to 17 oil fields, which hold roughly 65 billion barrels of proven reserves. NABEP, owned by Alejandro Betancourt, currently produces about 200,000 barrels per day in Venezuela, making it the second-largest private oil operator in the country after Chevron (CVX.US). The company already operates pipelines, drilling rigs, and other infrastructure in the region.
In exchange, NABEP has granted the US Office of Strategic Capital a 35% equity stake in its parent company. The White House claims this stake represents "hundreds of billions of dollars in value and dividend income." Additionally, NABEP has granted the US State Department the right to purchase 20% of its current and future oil production at production cost, with these barrels prioritized for replenishing the US Strategic Petroleum Reserve (SPR). The State Department also holds a right of first refusal on the remaining 80% of output, which the White House says will provide the US with "reliable hemispheric energy security" in emergencies.
The US also holds veto power over NABEP's board appointments, and a majority of board members must be US citizens. The entire agreement is governed by US law and is subject to judicial review in US courts.
On the financial front, NABEP plans to invest up to $100 billion in new oil infrastructure. The White House says this investment will drive economic growth in Venezuela and create thousands of jobs. Under Venezuela's newly enacted hydrocarbons law, which received US support, NABEP is expected to pay Caracas approximately $200 billion in royalties and taxes over the first 25 years. US officials claim their oversight will "ensure that taxes and royalties are used for the benefit of the Venezuelan people."
Strategic Intentions
The Trump administration has made no secret of the geopolitical aims behind this deal. The White House fact sheet explicitly states that Trump has "reasserted the Monroe Doctrine." Many of the oil fields NABEP will operate were previously controlled by Russian firms or were tied to associates of the Maduro and Chávez administrations. US officials say the agreement will "build strong, strategic, and defensible supply chains in the hemisphere" to serve American manufacturing and energy security.
This arrangement comes after US special forces captured then-President Nicolás Maduro in a nighttime raid in January and transported him to New York to face federal drug trafficking charges. In a national television address on Saturday evening, Venezuela's acting president Delcy Rodríguez defended the agreement, insisting that "one thing must be absolutely clear: Venezuela retains ownership and sovereignty over its resources." She called the agreement a step toward economic recovery that would modernize the country's oil industry, expressing hope that Venezuela would become a "global energy power." She also mentioned plans to pursue similar agreements with other multinational private companies such as Chevron, Repsol, and Shell (SHEL.US).
However, for American consumers, this deal is unlikely to produce meaningful relief at the gas pump in the short term. Experts have repeatedly warned that Venezuela's dilapidated oil infrastructure will require years and billions of dollars to repair, and any significant production increases cannot happen overnight. Amy Myers Jaffe, director of the Energy, Climate Justice, and Sustainability Lab at New York University, stated bluntly that the deal "might help in the long run, but it's not going to change retail gasoline prices at the pump over the Labor Day weekend."
Currently, a more significant factor influencing oil prices is the US-Iran conflict. After US forces struck Iranian rocket launchers near the Strait of Hormuz on Sunday, international oil prices rose. US crude climbed 1.8% on Monday to $84.94 per barrel. According to AAA data, the average US gasoline price reached $4.08 per gallon on Monday, a sharp increase from $3.19 a year ago. Kevin Book, managing director at ClearView Energy Partners, noted that Venezuela does have room to increase production — historically, its daily output was more than 2.5 million barrels above current levels — but an investment of this scale "will take time — many years — to deploy and produce the kind of incremental results that history suggests."
Legal and Political Risks
The agreement enters uncharted territory both legally and diplomatically. Amos Hochstein, who served as a senior energy advisor in the Biden administration, said the deal is "uncharted waters from a legal and diplomatic perspective" and carries "enormous risk" for companies considering doing business under the new arrangement. He noted that Democrats could challenge the agreement if they regain power in Washington, and a future Venezuelan government could also refuse to recognize it. "There are going to be a lot of challenges to what was just announced," Hochstein said. "All I can say is, if I were them, I'd be nervous. If I went back to my old job in the next administration, then they should be nervous."
Bob McNally, who served as an energy advisor in the George W. Bush administration, also pointed out that even if the terms pass legal scrutiny, investors will remain cautious. "A future president could pull back, and Caracas has already expelled foreign investors twice," he said. David Oxley, chief climate and commodities economist at Capital Economics, wrote in a commentary that on the surface, the deal could double US oil reserves and reduce reliance on Canadian and Mexican crude, but logistical hurdles exist, and valuations of Venezuela's reserves from the Chávez era may have been exaggerated. Even with legal and security guarantees, "it's unclear whether US oil companies would be interested in investing," he wrote, adding that "there may be more attractive commercial opportunities elsewhere."
Voices of Opposition
Within Venezuela, many citizens view the agreement as a betrayal of the nation's long-held stance that "Venezuela's resources belong to Venezuela," and that leaders would never allow the US government to access them. Ricardo Hausmann, a Harvard professor and former Venezuelan planning minister, called it a "shameful deal" on social media. "Venezuelans will not respect this illegitimate deal, and no major American oil company will take it seriously because they know it won't last," Hausmann wrote, adding that Rodríguez "has no legitimacy or constitutional authority to commit Venezuela to any such agreement."
US congressional reaction is equally polarized. Trump's allies quickly characterized the deal as a historic victory, while Democrats condemned it harshly, arguing that capturing Maduro was done precisely to achieve this end. Virginia Democratic Senator Tim Kaine said Trump "has had his eye on Venezuela's oil" and called the deal "epic corruption." "Will gas prices come down for Americans? Who knows, but probably not as much as Trump pushed them up through his stupid Iran war," Kaine wrote on social media. Maryland Democratic Senator Chris Van Hollen said Trump "put our military personnel in danger just to get Venezuela's oil for his billionaire friends."
Remaining Questions
Despite the White House fact sheet, many key details remain unclear. For instance, the US will receive 55% of NABEP's effective output, but it has not been clearly specified how much of that comes from the 35% equity stake versus the 20% cost-price purchase right. Neither side has disclosed who bears the cost of infrastructure investment or how costs will be shared. Whether large American oil companies will be willing to return to the region remains an open question. Chevron — currently the only US oil company actively producing in Venezuela — declined to comment, as did ExxonMobil. The American Petroleum Institute (API), the largest oil industry lobby group in the US, also refused to comment on Trump's proposal on Monday, saying it was continuing to review the information.
David Oxley of Capital Economics noted that on the surface, the deal could double US petroleum reserves and reduce dependence on Canadian and Mexican crude. However, Oxley warned in a commentary that there are logistical obstacles to project implementation, and the value of Venezuela's reserves may have been overstated during the era of former President Hugo Chávez. He pointed out that even with legal and security safeguards, it is unclear whether US oil companies "would be willing to invest," noting that "there may be more attractive commercial opportunities elsewhere in the world."