Trump's Venezuelan Oil Deal Could Stem Crude Price Surge

The price of Brent crude has risen by 20% over the past month to approximately $97 per barrel, driven in part by ongoing hostilities between Iran and the US, as well as restricted supply from the Middle East.

However, a new deal brokered by President Trump is expected to increase oil production in Venezuela, potentially offsetting some of the lost supply from the Middle East. Under the agreement, a private company called North American Blue Energy Partners will hold 17 oil concessions in Venezuela, with reserves estimated at 65 billion barrels.

The US Department of State will have the right to purchase up to 80% of production at cost, while the US Department of War will retain a 35% equity stake in the corporate parent of NABEP. The projected capital expenditure to bring this oil to market is estimated at $100 billion.

Analysts at Breakwave Advisors predict that Venezuelan production could rise by as much as 500,000 barrels per day by 2027, although it remains unclear how quickly output can increase beyond this point.