Trump’s Venezuela Oil Deal Promises Benefits for American Consumers — But Not Soon

President Trump’s deal securing access to a huge share of Venezuela’s oil reserves appears likely to yield major benefits for American consumers in the form of lower gas prices and greater energy security, analysts say — but not before this year’s midterm elections and likely not before the end of his term in January 2029.In the deal announced by Mr. Trump Friday evening on Truth Social, an American-controlled joint venture company will gain access to more than 65 billion barrels of proven oil reserves in Venezuela, more than doubling the assured reserves available to American refiners.But experts quoted by major news organizations point out that it will likely take years and billions of dollars in private investment to develop infrastructure and repair dilapidated equipment before most of that oil can be brought to market.“It is hard to see how this kind of arrangement would accelerate investment at any material scale,” David Goldwyn, president of Goldwyn Global Strategies, David Goldwyn, told Reuters. He pointed to political uncertainty in Venezuela, an inadequate power grid, limited export capacity and government control over the industry.Venezuela’s interim leader, Delcy Rodriguez, said in a statement the deal provides for the development of 17 oilfields along with an investment of more than $100 billion. But several of those oilfields are reported to lack any infrastructure or access to ready means of transport. Others have deteriorated through neglect and theft of machinery and will require major new investment before the oil can be brought to market.Few additional details have been released about the agreement, secured in negotiations between the interim Venezuelan government and the American secretaries of State and Defense, Marco Rubio and Pete Hegseth. But unnamed government officials quoted in news reports say the oil will be controlled through a joint venture between the United States government and an unidentified “experienced private operator in Venezuela,” with America holding a 55 percent stake.The Washington Post identifies that private operator as Alejandro Betancourt, who controls the second-largest private oil company in Venezuela and is sought for arrest in Switzerland on suspicion of money laundering. Mr. Betancourt, the head of North American Blue Energy Partners, has been the subject of money laundering probes in multiple countries, according to the Post, but has never been charged and denies any wrongdoing.The most immediate impact of the deal is the expected transfer, announced previously by Mr. Trump, of 30 to 50 million barrels of oil from Venezuela to America. That oil is already held in storage by Venezuela and is expected to go directly into America’s Strategic Petroleum Reserve, which has been drawn down in response to the disruption in the Strait of Hormuz.Beyond that, oil industry experts estimate it will take several years for private oil companies to dig new wells and install special equipment needed before Venezuela’s ultra-heavy crude can be transported through pipelines. Much of that work may be undertaken by the American oil giant Chevron, which was reported by the Wall Street Journal to be in advanced talks with Venezuela even before Friday’s announcement.Mr Trump assured on Truth Social that his deal comes “at no cost to the American Taxpayer,” indicating the $100 billion investment cited by Ms. Rodriguez will come entirely from private companies. However, some experts question whether the oil companies will be willing to make the needed investments without some government backing.Mr. Goldwyn points out that “the same risks” that have held back investment since the ouster of the former president, Nicolás Maduro, remain in place. These include uncertainty about the stability of the current interim government in Caracas and the existence of armed criminal networks that have kidnapped foreign executives and looted oilfield equipment.The chief executive of ExxonMobil, Darren Woods, earned the wrath of Mr. Trump when, days after Mr. Maduro’s arrest, he said that without changes to the laws in Venezuela he considered the country “uninvestable.”ExxonMobil and ConocoPhillips were deeply involved in oil operations in Venezuela before 2007, when their assets were seized and nationalized by the government of the then-president, Hugo Chavez. Over the next 13 years, oil production collapsed from roughly 2.4 million barrels per day to a low of just 392,000 bpd, but legal reforms since Mr. Maduro’s arrest have seen the output climb back to roughly 1.25 million bpd.

Trump’s Venezuela Oil Deal Promises Benefits for American Consumers — But Not Soon

Trump’s Venezuela Oil Deal Promises Benefits for American Consumers — But Not Soon

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