A sweeping new oil production agreement between the US and Venezuela is a geopolitical opportunity for Washington to secure access to oilfields that have largely been under the influence of Chinese and Russian companies, a US official said on Tuesday.
The “historic” deal between the administration of US President Donald Trump and Venezuela’s interim President Delcy Rodriguez will be enabled by increased private-sector investment from American companies in the country.
US Energy Secretary Chris Wright will travel to Venezuela on Wednesday to sign an oil agreement that will see Chevron expand its existing operations and production capacity in the country.
The US official told reporters that Washington could use Venezuelan oil supplies to replenish its own strategic reserves or generate revenue.
“Related to our national interest in the geopolitics is the desire, of course, to have a reliable and stable supply of energy for the future,” the US official said. “As we have seen, there are challenges throughout the world, irrespective even predating the conflict with Iran.”
The development comes after Mr Trump last week announced a deal that would give the US control of about a fifth of Venezuela’s vast oil reserves, claiming it would lower energy prices for Americans.
“I think it’s going to have a tremendous impact,” he told reporters on Monday. “It’s going to ultimately – prices are going to come down.”
The deal gives a US-backed venture, North American Blue Energy Partners, control of 65 billion barrels of proven reserves, while granting Washington preferential access to production. It will also give the venture 100-year concessions to develop 17 Venezuelan oilfields.
“There are those that say it was the greatest deal ever made,” Mr Trump said. “Let’s see what happens.”
The agreement comes at a critical moment for the Trump administration, as efforts to end the war in Iran remain stalled after the conflict disrupted global oil flows and sent energy prices higher.
The US is heading into midterm elections in November, with Mr Trump facing voters concerned about rising costs and his handling of an unpopular war.
It has also withdrawn from its strategic oil reserves amid disruptions to shipments through the Strait of Hormuz, which normally carries about a fifth of the world’s crude and has been at the centre of the stand-off with Iran.
On Tuesday, Treasury Secretary Scott Bessent said he expects the Strait of Hormuz to soon become "worthless", as Gulf states fast-track alternatives to send energy supplies to the global market.
Ms Rodriguez, who took over after Venezuelan leader Nicolas Maduro was captured by the US military and taken to New York to face narco-terrorism charges, said the agreement would have a significant effect on Venezuela’s “revival”, although she gave a conflicting account of its duration, saying it would last 25 years.
"The great energy agreement with the United States follows our path to transform Venezuela, from a country with great reserves, into an oil-producing power, for the benefit and happiness of the Venezuelan people," she said in a national address at the weekend.
Chris Van Hollen, a Democratic senator from Maryland and a frequent critic of Mr Trump’s policies, called the agreement a “grab” of Venezuelan oil that would further enrich private companies.
“After Trump’s illegal Venezuela raid, I called it out for what it was: A reckless act of war to grab Venezuelan oil for US oil companies and Trump’s billionaire buddies,” Mr Van Hollen wrote on X.
“Now, the same people who said I was wrong then are celebrating Trump’s oil ‘deal'.”
Mr Trump was set to meet oil and gas executives on Tuesday in a closed-door meeting at the White House.
