Trump’s Venezuela Oil Deal Explained: How Much Control Will the US Have Over Its Reserves?

US President Donald Trump has announced what he described as an agreement giving the United States majority control over more than 65 billion barrels of Venezuela’s proven oil reserves, roughly a fifth of the country’s vast reserves, as Washington seeks to expand its role in the oil industry and secure more crude for US refineries.

Trump made the announcement on Friday following weeks of negotiations between Washington and Caracas. He provided few details about the arrangement, including its legal and financial structure, the fields and companies involved, or how the United States would exercise majority control. The negotiations have centred on a deal that would give American companies long-term access to Venezuelan oilfields and secure the resulting crude supply for the United States, while the Trump administration hopes increased supplies will help lower fuel prices.

Venezuela, an OPEC nation with the world’s largest proven oil reserves, produces only about 1.25 million barrels per day, well below its potential after years of underinvestment, mismanagement and sanctions. The Venezuelan government welcomed the agreement, saying it would increase production, attract private investment and raise government revenue.

According to Reuters, Venezuelan officials are preparing to sign agreements next week granting new oil exploration and production rights to several companies, particularly US firms.

What the proposed oil arrangement involves

Trump said the agreement was secured at his direction by Secretary of State Marco Rubio and Secretary of War Pete Hegseth, working with Venezuelan interim President Delcy Rodriguez and private businesses.

"At my direction, Secretary of State Marco Rubio, and Secretary of War Pete Hegseth, working closely with Highly Respected Interim President of Venezuela, Delcy Rodriguez, and, through a partnership with private business, have secured majority U.S. control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela, at no cost to the American Taxpayer," Trump wrote on Truth Social.

The announcement came after negotiations over a deal that would give American companies long-term access to a group of Venezuelan oilfields and guarantee the resulting crude supply to the United States.

Reuters reported that a lease model was under consideration, with fields potentially auctioned to US producers. The arrangement could face legal and constitutional challenges because the Venezuelan state retains control over core activities in the oil industry.

A list seen by Reuters shows that the fields are located in the Orinoco Belt and Lake Maracaibo regions.

Trump did not disclose the structure of the agreement, the fields or companies involved, or how the United States would exercise majority control over the reserves.

Investment and production plans

Rubio described the agreement as a win for both countries, saying it would secure stable, low-cost oil supplies for the United States and help lower gasoline prices.

For Venezuela, Rubio said the deal would bring nearly $100 billion in private investment, support thousands of high-paying jobs and help rebuild the country’s economy.

Rodriguez said the agreement would allow production to increase significantly through the development of 17 strategic fields. She said the resulting investment would generate $209 billion in tax revenue for the Venezuelan government.

"These investments will contribute not only to the recovery and modernization of our industry, but also to our country’s economic growth, the energy security of our hemisphere, and greater balance in international markets," she said in a statement late on Friday.

Rodriguez became interim leader after the United States seized President Nicolas Maduro in January.

Legal questions and investment hurdles

Analysts said they would need more details on the agreement’s legal and financial structure before determining whether it could attract significant investment.

David Goldwyn, president of Goldwyn Global Strategies, said it was unclear whether a US government lease would have a legal basis under Venezuela’s constitution and its new hydrocarbons law. He added that there was "no precedent for having the U.S. government enter into a lease to operate oil fields."

Goldwyn also questioned whether the arrangement would address the obstacles that have discouraged investment in Venezuela’s oil industry for years.

"It is hard to see how this kind of arrangement would accelerate investment at any material scale," he said, citing political uncertainty, an inadequate power grid, limited export capacity and government discretion over the industry.

It is also unclear whether the agreement would lower petrol prices in the short term. Venezuela produces heavy crude, and developing the infrastructure required to produce, transport and refine the additional oil could take years.

Washington seeks more Venezuelan crude

Since removing Maduro, Washington has sought to secure a stable flow of Venezuelan crude for US refineries while promoting American investment in the country’s oil industry.

The Trump administration is under pressure ahead of the November midterm elections to address consumer concerns over rising petrol prices. Increased Venezuelan production and cheaper oil supplies could help, although any effect may take time to reach consumers.

The United States has also been seeking ways to replenish its Strategic Petroleum Reserve, the country’s oil stockpile, including the possibility of crude swaps with US producers.

Venezuela nationalised its oil industry in the 1970s, placing state-run PDVSA at its centre. Under then-President Hugo Chavez, the government tightened its control over the sector, requiring foreign producers to operate through state-led joint ventures and later expropriating assets.

The expropriated projects included operations run by ExxonMobil and ConocoPhillips.

The proposed agreement would expand US involvement in Venezuela’s oil industry, but its legal basis, financial structure, participating companies and method of exercising control have yet to be disclosed.