Amid the ongoing war between the United States and Iran, the US and Venezuela have signed a landmark oil deal. US President Donald Trump announced that Washington has secured control over access to 65 billion barrels of Venezuelan oil reserves, describing it as the largest energy deal in world history.
Venezuela’s interim President Delcy Rodriguez said the agreement with the US would aid the country’s economic revival and support the development of 17 oil fields, expressing hope that it could bring in nearly $100 billion in private investment.
US Secretary of State Marco Rubio called the deal a major win for both countries, saying it would bring billions of dollars in private investment into Venezuela while also helping bring down gas prices in the United States. Rubio said oil purchased from Venezuela could be used to replenish the US Strategic Petroleum Reserve as well as meet military requirements.
The deal comes as the six-month-long war with Iran has led to a severe oil shortage in the United States, with prolonged tensions in the Strait of Hormuz — a critical route for global oil transportation — continuing to disrupt gas supplies. It is in this context that Trump has turned his focus to Venezuela to help shore up US oil reserves. Under the agreement, the US will hold a partial ownership stake in Venezuela’s oil production and secure the right to purchase the oil at cost price.
However, experts caution that despite the deal, oil prices in the US are unlikely to fall immediately, and that extracting oil from Venezuela at scale could take several years to materialise.