WASHINGTON (AP) — The White House has provided limited information regarding President Donald Trump's announcement of what he describes as 'THE BIGGEST OIL DEAL IN WORLD HISTORY' in Venezuela. Trump stated that the agreement, announced on Friday night, would grant the United States a stake in Venezuela's oil reserves, following the capture of then-President Nicolás Maduro by American forces in January. Venezuela's acting president, Delcy Rodríguez, characterized the deal as a step toward economic recovery and modernization of the oil industry. However, specifics regarding the timeline for drilling and funding remain unclear, as no formal agreement text has been released.
The terms of the deal involve the formation of a new private company by the U.S. government and an unnamed private operator in Venezuela, which has been granted rights to extensive oil fields for a duration of 100 years. Rodríguez stated that the deal encompasses the development of 17 fields with a proven potential of 65 billion barrels, potentially attracting $100 billion in investments and generating over $209 billion in taxes for Caracas.
Trump indicated that the agreement was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Rodríguez. The deal would provide the United States with 55% effective output of the new private company, including ownership stakes and rights to purchase oil at cost. According to a U.S. official who spoke anonymously, American purchases of the oil will contribute to the U.S. strategic oil reserves and military needs. The company is expected to become the second largest corporate holder of proven reserves after Saudi Aramco.
Trump suggested that the deal would help lower gas prices for Americans, a key objective as the Iran conflict disrupts Persian Gulf oil shipments and elevates prices ahead of the November elections. However, experts caution that Venezuela's deteriorating oil infrastructure will require years and substantial investments to repair, and a significant increase in production is not anticipated in the short term. Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, noted that while the deal could be beneficial in the long run, it is unlikely to affect gasoline prices immediately.
The average gas price in the U.S. was approximately $4.08 per gallon on Saturday, compared to $3.20 at the same time last year. Kevin Book, managing director at ClearView Energy Partners, emphasized the need for caution due to the lack of details about the deal, stating that while Venezuela has the potential to increase oil production, such investments take time.
In Venezuela, reactions to the deal have been mixed, with some citizens viewing it as a betrayal of the government's long-standing position that Venezuelan resources should benefit the nation. Douglas Borjas, a market vendor in Caracas, expressed discontent, suggesting that the deal serves to maintain the power of current leaders rather than benefit the populace. Harvard University professor Ricardo Hausmann criticized the agreement, asserting that it lacks legitimacy and will not be respected by Venezuelans or major U.S. oil companies.
On Capitol Hill, lawmakers from both parties have expressed their views on the arrangement. Trump supporters hailed it as a significant achievement, while Democrats condemned the circumstances surrounding Maduro's capture. Senator Bernie Moreno, R-Ohio, called it a historic deal, while Senator Tim Kaine, D-Va., criticized it as an example of corruption. Senator Chris Van Hollen, D-Md., accused Trump of jeopardizing service members for the benefit of wealthy associates.
SOURCE: apnews.com