Venezuela Deal May Take Years to Yield Lower Gas Prices
President Donald Trump recently announced a deal to acquire a significant stake in Venezuela's oil reserves, claiming it would lower gas prices for Americans. The agreement gives the U.S. government a 35 percent stake in Venezuelan oil production company North American Blue Energy Partners (NABEP), which has contracts to operate 17 oil fields with an estimated 65 billion barrels of reserves.
The deal is seen as a way to refill the Strategic Petroleum Reserve, which has been depleted to its lowest level since 1982. The reserve can hold up to 714 million barrels of crude and is used in times of shortage or crisis. However, many experts believe it will take years for substantial amounts of new oil to flow from Venezuela, making it unlikely to have a significant impact on gas prices before the midterm elections.
The deal also raises concerns about risk to taxpayers, as the U.S. would be claiming its stake through an office of the Pentagon that has been working with private companies to 'accelerate and scale private investment in critical supply chain technologies.' The expectation is that it would step up with loan guarantees or other major backing to major oil firms and investors.