US-Venezuela Oil Deal Set to Pump Billions into Struggling Industry
US President Donald Trump has signed what he calls 'the biggest oil deal in world history' with Venezuela. The agreement, negotiated by Secretary of State Marco Rubio and Defense Secretary Pete Hegseth, aims to revive Venezuela's struggling oil industry through a new company that will operate on 17 fields for 100 years. According to Interim President Delcy Rodriguez, the deal is designed to increase Venezuela's oil production to 1.5 million barrels per day, bringing in $100 billion in investment and generating over $209 billion in taxes.
The US government has set up a new company with rights to untapped oil fields through its partnership with an unnamed private operator in Venezuela. The company will hold 55% of the effective output, with the right to buy oil at cost from the remaining 45%. This oil will be used to fill the US strategic oil reserves and for military purposes.
Trump claims that this deal will help lower gasoline prices in the US, but experts are skeptical. Venezuela's oil infrastructure is in poor shape and will require years of investment to repair. Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, stated that while the deal could be 'helpful in the long run,' it won't have an immediate impact on gasoline prices.
The agreement has drawn criticism from Venezuelans who see it as a betrayal of their country's resources. Harvard University professor Ricardo Hausmann called the deal a 'shameful' one, stating that Venezuelans will not respect this illegitimate arrangement and that major US oil companies will also be hesitant to get involved.