Washington: The US has struck a deal with Venezuela to control more than 65 billion barrels of its proven oil reserves, President Donald Trump announced. The agreement, which Trump claims will more than double American oil reserves, is touted to significantly lower gas prices for Americans amid rising domestic pressure due to soaring petrol prices caused by the Iran conflict.
According to BBC, Venezuela’s interim President Delcy Rodríguez hailed the deal in a late-night address as a crucial step towards the nation’s economic revival. Rodríguez, Maduro’s former vice-president, emphasized that the energy agreement would remain in force for 25 years and aims to increase crude output to 1.5 million barrels per day while preserving the country’s sovereignty over its natural resources.
However, the deal has been met with skepticism by some analysts, who question its ability to overcome long-standing obstacles that have hindered investment in Venezuela’s oil industry. Trump, who has been striving to manage domestic fuel prices, vowed to tap into Venezuela’s reserves after the US captured its then-President Nicolás Maduro in January to stand trial on drug charges in New York.
Under the agreement, the US government will hold 55% control of a joint venture with an experienced private operator in Venezuela, according to US officials. Rodríguez granted the venture a 100-year concession to operate in the oil fields. US Secretary of State Marco Rubio called the deal a significant victory for both American and Venezuelan citizens, citing nearly $100 billion in private investment and potential job creation in Venezuela.
Despite the positive narrative presented by Trump and Rodríguez, concerns remain regarding the lack of detail and transparency surrounding the agreement. Henrique Capriles, a moderate opposition lawmaker in Venezuela, raised doubts about the agreement, citing the government’s opacity and corruption. David Goldwyn, president of energy consultancy Goldwyn Global Strategies, noted the unprecedented nature of the deal and potential legal challenges under Venezuelan law.
Additionally, experts like Rachel Ziemba from The Center for New American Security caution that the agreement may not have a substantial impact on global oil supplies in the near term. Nonetheless, US energy firms Chevron and Halliburton are reportedly nearing deals to invest billions in revitalizing Venezuela’s oil infrastructure, which could breathe new life into the country’s oil production.
As the situation unfolds, the world watches closely to see how this unprecedented agreement will impact both the US and Venezuela’s economic landscapes and the global oil market.