Trump Announces Venezuela Oil Deal Giving US Majority Control of 65 Billion Barrels

US President Donald Trump announced on Friday, August 28, on Truth Social an agreement with Venezuela that, according to the White House, gives Washington majority control over more than 65 billion barrels of proven oil reserves, roughly a fifth of Venezuela's oil wealth, calling it "the biggest oil deal in world history". According to a US official cited by CBS News, interim President Delcy Rodriguez granted a private joint venture a 100-year concession to operate oil fields that make up those 65 billion barrels: the US government would control 55% of the company, through an equity stake and the right to obtain oil at cost for the Strategic Petroleum Reserve, the US emergency stockpile sitting at its lowest level since 1982 with 289.7 million barrels against a 714 million capacity.

What Washington says the deal includes

Trump claimed the transaction "more than doubles American oil reserves", estimated at about 46 billion barrels at the end of 2024 and declining, and promised lower gasoline prices for years to come, stressing that the deal costs American taxpayers nothing because it is built "through a partnership with private business". Secretary of State Marco Rubio spoke of nearly 100 billion dollars in private investment and thousands of jobs to rebuild Venezuela's economy. The official described the venture as set to become the world's second-largest corporate holder of proven reserves after Saudi Aramco. Which private companies will take part is still unclear: among the foreign operators still present in Venezuela are the US Chevron, Spain's Repsol and Italy's Eni, while ExxonMobil and ConocoPhillips left after Hugo Chavez's nationalizations.

The accounts that do not match

Two days after the announcement no text of the agreement has been released and the American descriptions contradict each other. Pentagon spokesman Sean Parnell denied the structure first reported by an official, saying the Office of Strategic Capital "does not take equity stakes in private companies". The Wall Street Journal instead reported a 35% passive stake in North American Blue Energy Partners, a firm already pumping about 200,000 barrels a day in Venezuela and run by oil trader Alejandro Betancourt, financed through Pentagon penny warrants rather than a direct equity purchase. Weeks before the announcement a Betancourt-linked buyer had taken over a minority stake belonging to trader Harry Sargeant III, whose offshore vehicle was later frozen by the Treasury. Analyst Rory Johnston called the 65-billion-barrel figure a red herring with little relevance to the real details, which remain almost entirely unknown.

Caracas's numbers under scrutiny

Rodriguez called the deal historic, with a "significant impact on our nation's revival": 25 years, 17 fields across the Orinoco Belt and Lake Maracaibo, a production target of 1.5 million barrels a day and over 209 billion dollars in tax revenue. The estimate, however, assumes oil holding at 65 dollars a barrel for a quarter of a century, while Brent trades above 90 dollars, and gives Caracas 19 dollars for every barrel produced. Economist Francisco Rodriguez calculated that 209 billion over 25 years works out to about 8.4 billion a year, less than the 18.4 billion Venezuela collected in 2025 while producing barely 941,000 barrels a day, and that 19 dollars in 2051, adjusted for inflation, are worth roughly 9 today. Under Hugo Chavez's fiscal terms the country collected more than 75 cents of every dollar of oil extracted.

How long production will take

Venezuela holds the world's largest proven reserves, 303 billion barrels according to the EIA, but after years of underinvestment and sanctions it produces just under a million barrels a day. Much of the Orinoco Belt's crude is extra-heavy and must be blended with diluents to travel through pipelines: Rystad Energy estimated that raising output even 17% by 2028 would require higher drilling activity, extensive workover campaigns, improved infrastructure and significantly greater rig availability. Francisco Monaldi of Rice University's Baker Institute told NPR that many of the deal's fields are still undeveloped and will take years to produce anything, making a near-term jump in supply unlikely. Legacy claims weigh too: ConocoPhillips holds arbitration awards of 10 to 12 billion dollars and its CEO Ryan Lance has said collecting the debt is a condition for investing again; the country's unresolved nationalization claims and defaulted bonds total about 170 billion; ExxonMobil CEO Darren Woods has called Venezuela uninvestable until its legal and economic system changes, after US assets were seized in two waves. In August, Hunt Oil nonetheless signed a deal with PDVSA, a sign that someone is already returning.

The market is not celebrating

Oil traders are not pricing in a wave of new supply: Brent jumped more than 2% on Monday morning over US strikes on Iranian rocket launchers near the Strait of Hormuz, not over the deal with Caracas. The strategic stakes remain enormous, but the decisive variable is how quickly reserves on paper turn into barrels shipped, and on that point Washington has not yet given a consistent answer.

Sources

• CBS News
• Al Jazeera
• OilPrice.com