WASHINGTON (AP) – Other than a social media update from President Donald Trump, the White House hasn’t shared much about what he calls “THE BIGGEST OIL DEAL IN WORLD HISTORY” in Venezuela.
Trump mentioned that the agreement revealed Friday night would allow the United States to access Venezuela’s vast oil reserves, moving closer to his aim of extracting energy from the country after American forces captured former President Nicolás Maduro during a nighttime raid in January and took him to New York to face federal drug trafficking charges.
Delcy Rodríguez, Venezuela’s acting president, referred to the deal as a step toward economic recovery that will help modernize the country’s oil sector.
However, many questions remain unanswered, such as when drilling could start and who will finance it. No written agreement has been made public.
Here’s what we know and don’t know:
What are the details?
A new company was formed by the U. S. government and an undisclosed private operator in Venezuela, which received rights to undeveloped oil fields for 100 years.
Rodríguez stated that this deal covers 17 fields with a proven potential of 65 billion barrels. The agreement could attract $100 billion in investment into Venezuela’s oil industry and generate over $209 billion in taxes for Caracas.
Trump said Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Rodríguez were involved in negotiating this deal.
: Trump says U. S. has entered deal with Venezuela to control 65 billion barrels of its oil reserves
The arrangement gives the United States a 55% effective output from this new private company, including an ownership share and rights to purchase oil at cost. According to an unnamed U. S. official who spoke on condition of anonymity because they weren’t authorized to discuss it publicly, American purchases will contribute towards U. S. strategic oil reserves along with military needs.
This company is expected to become the second-largest corporate holder of proven reserves after Saudi Aramco, according to this official.
Will gas prices drop?
Nope, probably not anytime soon.
Trump claims this deal will lower gas prices for Americans. This is crucial for the Republican president as tensions from the Iran conflict hinder Persian Gulf oil shipping and keep prices high just months ahead of November elections in America.
But experts have consistently warned that fixing Venezuela’s damaged oil infrastructure could take years and require billions of dollars. A significant increase in production isn’t anticipated right away.
The deal might be “helpful over time, but it’s not going to change gas prices at retail stations before Labor Day weekend,” said Amy Myers Jaffe, director of NYU’s Energy, Climate Justice and Sustainability Lab.
No one clarified who would fund infrastructure improvements or how much it would cost.
The average price for gas in the U. S. was around $4.08 per gallon on Saturday according to AAA; last year at this time it was $3.20 per gallon.
Kevin Book from Clear View Energy Partners stated that clarity on details regarding this deal is eagerly awaited by those in the oil industry. He mentioned there’s potential for increased production since historically Venezuelan output exceeded 2.5 million barrels daily compared to current levels-but investments like these take time.
“It’s going to take years-many years-to put down that much capital and achieve results consistent with historical patterns,” Book added.
How might Venezuelans respond?
Certain individuals within Venezuela view this as a betrayal against their government’s long-standing assertion: Venezuelan resources belong solely to Venezuelans; leaders wouldn’t allow U. S. access anymore.
Dorothy Borjas at a market in eastern Caracas expressed dissatisfaction with news about this agreement on Saturday.
:”With gas stuck above $4, U. S. consumer confidence falls to lowest level in 7 months”
“I think they’re doing it just hold onto power,” he remarked about local leaders’ actions concerning resources.
“It’s like saying ‘I’m giving you tons of petroleum as long as you leave me here.’”
He further commented: ”The Venezuelan populace deserves better than this.” He insisted:“Venezuela possesses exploitable resources but they should benefit its people-not corrupt elites.”
Harvard University professor Ricardo Hausmann called it “a disgraceful pact.”
“Venezuelans won’t honor such illegitimate agreements; no prominent US-based energy firm would treat them seriously due realization they’ll likely prove fleeting,” Hausmann remarked via social media while adding Rodrigues “holds neither legitimacy nor constitutional authority allowing her any decisions pertaining deals.”
What’s happening on Capitol Hill?
It remains uncertain if Congress will have influence over these arrangements but legislators across party lines quickly offered opinions.
Trump supporters labeled it victorious.
Sen Tim Kaine D-Va branded motivations behind negotiations purely driven by greed remarking :“Will there even be price drops ? Who knows? Likely lessened due ongoing inflation pressure caused partially through Trumps mismanagement surrounding Iranian turmoil.”Sen Chris Van Hollen D-Md reiterated arguments placing risks borne onto service members all aimed squarely towards profit seeking endeavors benefiting specific wealthy parties.”
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