US strikes oil deal with Venezuela for 65B barrels
What's the story
United States President Donald Trump has announced a landmark agreement with Venezuela, granting the US access to its vast untapped oil reserves. The deal was brokered by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and interim Venezuelan President Delcy Rodriguez. It covers 17 fields with a proven potential of 65 billion barrels of oil and could attract $100 billion in investments to Venezuela's oil industry.
Investment potential
Deal could generate over $209 billion in taxes for Caracas
Rodriguez's government has said the agreement could generate over $209 billion in taxes for Caracas.
The deal gives the United States a 55% effective output of a new private company that would be formed to manage these reserves.
This company would become the second-largest corporate holder of proven reserves after Saudi Aramco, according to an official.
Preceding events
Deal comes after US military operation to capture Maduro
The announcement comes almost nine months after a US military operation, ordered by Trump, to capture Venezuela's then-President Nicolas Maduro.
Maduro is currently imprisoned in the United States on federal narcoterrorism and drug trafficking charges.
Despite the potential benefits of this deal, experts caution that a significant increase in Venezuelan oil production will take years and cost billions due to infrastructure repairs and expansion costs.
Legal changes
Rodriguez amends oil sector law to permit privatization
In a major policy shift, Rodriguez's government has amended Venezuela's oil sector law to permit privatization. This reverses more than two decades of socialist policies in the country.
Rubio hailed the agreement as "a huge win for both the American and Venezuelan people," adding that it would bring billions in private investment into Venezuela and lower gas prices in the US.
Global ranking
Venezuela has 1 of the world's largest oil reserves
Notably, Venezuela is home to one of the world's largest oil reserves, with an estimated 303 billion barrels of crude oil.
This accounts for roughly 17% of global supplies, according to the US Energy Information Administration.
However, due to dilapidated infrastructure, Venezuela only produces around 1% of the world's oil.