Donald Trump boasts of having signed the “largest oil deal in world history”. Washington and Caracas announced on Friday that they had reached a “historic” oil deal, which will see the United States take majority control of more than 65 billion barrels of Venezuela’s reserves. According to the American president, this will double his country’s oil reserves.
The head of state specified that the agreement was established “through a partnership with private companies” and “in close collaboration with the interim president of Venezuela, Delcy Rodriguez”. According to her, the agreement plans to “develop 17 strategic fields, with a proven potential of 65 billion barrels of oil, an investment of more than $100 billion and more than $209 billion in tax revenue for the” Venezuelan state. This will promote “the reconstruction of the Venezuelan economy”, underlined the head of American diplomacy Marco Rubio on X.
Reduce the price of gasoline
Venezuela has the largest proven oil reserves in the world, with more than 303 billion barrels. But its production remains limited. At the same time, American strategic stocks are at their lowest level since November 1982, according to data from the American Energy Information Agency (EIA). The cause: supply disruptions and the rise in crude prices linked to the ongoing war in the Middle East.
According to Donald Trump, “this historic transaction” between the United States and Venezuela will “significantly reduce the price of gasoline for all Americans for many years.” He also assures that this agreement “will not cost American taxpayers anything”.
Since the American military raid which led to the capture of Nicolas Maduro in early January, Donald Trump wants to relaunch the exploitation of Venezuelan oil and gas resources under his own patronage. The American government is trying to push American companies to get involved in the country, however sparking mixed reactions to the heavy investments necessary to rehabilitate the country’s oil infrastructure and extract black gold.
An announcement effect?
A reluctance also aroused by the expropriations carried out by the Venezuelan regime in the past. The American giant ExxonMobil was notably on two occasions. “The main problem in Venezuela was safety and security,” comments Again Capital analyst John Kilduff. According to him, the United States could seek with this agreement to “create a sort of state zone where American companies can establish themselves, carry out their activities without suffering repercussions, and (…) eliminate the political risk that usually accompanies investments in Venezuela”.
For Jorge R. Pinon, researcher at the Energy Institute at the University of Texas at Austin, many “gray areas” remain, however, including the risk that a future Venezuelan government will suddenly change “the rules of the game”, calling into question any current agreement. “These are projects that will certainly take many years to see the light of day and bear fruit,” said oil expert Oswaldo Felizzola.
According to Elias Ferrer, founder of the Orinoco Research think tank, this announcement is “a game of narratives around agreements which were already being negotiated”, the purchase by the United States of Venezuelan crude being in all cases “guaranteed”. According to the expert, Donald Trump presents these arrangements as a political victory, placing them in the broader context of the conflict in the Middle East and the surge in energy prices.
