US Seals Venezuela Oil Deal Amid Hormuz Tensions
The US and Venezuela have signed a landmark oil deal amidst rising tensions in the Middle East. The agreement grants the US access to 65 billion barrels of Venezuelan oil reserves, which President Donald Trump calls 'the largest energy deal in world history'. This move is part of Washington's efforts to shore up its oil supplies, particularly after the six-month-long war with Iran led to a severe oil shortage and prolonged tensions in the Strait of Hormuz.
Venezuela's interim President Delcy Rodriguez sees this agreement as crucial for the country's economic revival. The deal will support the development of 17 oil fields, potentially bringing in nearly $100 billion in private investment, according to Rodriguez. US Secretary of State Marco Rubio emphasized that the deal would bring billions of dollars in private investment into Venezuela while also helping to bring down gas prices in the United States.
The agreement gives the US a partial ownership stake in Venezuela's oil production and secures the right to purchase oil at cost price. However, experts caution that extracting oil from Venezuela at scale could take several years to materialise, which may not immediately lead to lower oil prices in the US.