Trump Announces Major Venezuela Oil Deal Worth $100 Billion

The US President, Donald Trump, made a groundbreaking announcement about a major oil deal with Venezuela, where the US gets majority control of 65 billion barrels of proven oil reserves. Trump called it “the biggest oil deal in world history”, whereas the US Secretary of State, Marco Rubio, claimed that it can attract almost $100 billion of investments from private companies to Venezuela. This deal can dramatically change relations in the sphere of energy between Washington and Caracas. Meanwhile, the government of Venezuela had not confirmed the deal yet.

What Is the Trump-Venezuela Oil Deal?

Trump declared the deal on Friday, saying that the US administration signed the deal with Venezuela through a partnership of private companies.

As was reported by Trump, the deal grants the United States majority control of 65 billion barrels of proven oil reserves.

The Secretary of State, Marco Rubio, noted that the deal can attract almost $100 billion of private investments to Venezuela and help with creating new jobs and rebuilding its economy.

Why is Venezuela Crucial for the United States?

Venezuela is the owner of the largest proven oil deposits in the world, which are estimated at some 300 billion barrels.

This particular deal is announced following significant political changes in Venezuela and increased US participation in the country’s internal politics.

According to Trump, the deal will increase US oil reserves by more than two times.

How Would US Businesses Work on Venezuelan Oil Deposits?

Information suggests that the agreement may include the work of private companies, such as American energy corporations, on productive Venezuelan oil deposits.

These companies will supposedly get the right of ownership while increasing oil production and sending back more profit to Venezuela.

Previously it was reported that there had been negotiations between Washington and Caracas regarding several Venezuelan oil deposits that contained up to 90 billion barrels of proven oil reserves. Now, however, only 65 billion barrels of oil are mentioned.

Will the Agreement Bring Down Gas Prices in the US?

Trump has stated that the deal could assist in bringing down the prices of gasoline in America by allowing increased oil supplies.

The timing is critical, given the current state of affairs in the world’s energy markets, considering the disruptions to the oil supply that cause increases in the price of oil.

According to Rubio, the deal will help the country obtain cheap and stable oil supplies in the Western Hemisphere and ensure energy security for America.

Nevertheless, the impact of this deal on US gas prices will depend on production rates, investment, infrastructure, and global oil prices.

The Reasons Why Venezuela Needs Private Investment

Underinvestment, decreasing production levels, and deterioration of infrastructure in the oil industry of Venezuela have been long-standing issues.

US companies have been hesitant to make any significant investments due to fears associated with the infrastructure and previous nationalization of foreign property.

The only US oil company that remained operational in Venezuela following the political turmoil has declared that it achieved production of 280,000 barrels per day in July, with plans to double that amount until the end of 2028.