Trump Touts 'Biggest Oil Deal in World History' as Venezuela Oil Reserves Get New Life
US President Donald Trump has announced a deal to develop Venezuela's vast oil reserves, which could impact Canada's oil industry. The agreement involves a new private company that will have rights to 17 fields with a proven potential of 65 billion barrels of oil for 100 years.
The US government and the unnamed private operator formed the company, which will give the United States 55% effective output, including an ownership stake and rights to buy oil at cost. American purchases of the oil will go toward the US strategic oil reserves along with the military.
Experts say increased exports from Venezuela would compete directly with Canadian crude in the US Gulf Coast market, which accounts for about 10% of Canadian oil exports to the US. A rapid and large-scale increase in Venezuelan oil production isn't likely after years of under-investment, sanctions, and political uncertainty.
A gradual recovery could reintroduce meaningful competition into the North American heavy crude market, widening the differential between Canadian heavy crude and benchmark US crude prices.