Inside the US-Venezuela oil deal: Will 65 billion barrels lower gas prices?

US Secretary of State Marco Rubio and Secretary of War Pete Hegseth signed the deal. According to the White House’s ‘Fact Sheet’ published August 31, the agreement will consolidate the US’ energy dominance for the next 100 years without exerting any pressure on American taxpayers.

Given the deal’s context and details, Americans’ instant takeaway would have been that the new US-Venezuela partnership would help bring down oil and gas prices that have otherwise surged to concerning levels since the US and Israel started the war on Iran in late February.

On Friday, Donald Trump acknowledged those hopes, saying that the deal “will substantially lower Gas Prices for Americans, long into the future.” A White House official also confirmed to ABC News that Trump is set to meet with oil refiners and distributors Tuesday at the presidential mansion, as the US pushed them to expand America’s refining capacity to lower gas prices.

However, energy experts suggest otherwise.

Currently, the average US gas price is still above $4 a gallon nationwide, according to AAA. Meanwhile, oil prices climbed on Tuesday as fighting between the US and Iran resumed. At 0044 GMT, the international benchmark Brent crude futures were up 56 cents, or 0.6%, to $91.05 a barrel, while US West Texas Intermediate crude surged 83 cents, or 1%, to $86.59. During the previous session, Brent closed up 2.7% at one point, reaching its highest since August 25.

Details of the US-Venezuela oil deal released

As part of Trump’s push to tap into the Venezuelan oil industry, the White House announced that it is partnering with North American Blue Energy Partners (NABEP). The deal will give the Pentagon a stake over roughly a fifth of the country’s oil reserves. NABEP, which is already the second largest producer in Venezuela after Chevron, is owned by Venezuelan businessman Alejandro Betancourt.

Its joint venture with the United States will see both sides creating a new private company. The Trump administration confirmed that NABEP granted the US Department of War’s Office of Strategic Capital a 35% equity stake in its corporate parent, representing up to hundreds of billions in value for the US, at no cost to the American taxpayer.

As also affirmed by Venezuela’s Acting President Delcy Rodriguez, the White House’s Fact Sheet noted that the deal has given the company 100-year rights over 17 oil fields with proven reserves of approximately 65 billion barrels. The joint venture even granted the US Department of State the right to buy a guaranteed 20% of the output at cost.

Trump’s White House asserted that the agreement will ensure a “stable supply of low-cost oil,” which will, in turn, facilitate the regeneration of the Strategic Petroleum Reserve (SPR), which the current administration says was depleted to “historic lows” during his predecessor Joe Biden’s presidency.

“NABEP has also granted the U.S. Department of State the right of first refusal to purchase the remaining 80% of its production, providing a guaranteed source of energy in our hemisphere in emergency situations,” the White House added in its Fact Sheet dated August 31, 2026.

As per the deal, the US government will hold veto power over NABEP’s members of the board of directors–a majority of whom will be US citizens.

The White House further laid out that millions of barrels of new Venezuelan oil will be processed through US refineries and pumped with American infrastructure. The larger picture will help boost investment worth billions of dollars in the US, in addition to supporting thousands of American jobs.

Strengthening Venezuela’s oil sector

Hailing the “groundbreaking privatisation and investment” in the Venezuelan energy sector, the White House pointed out that it was all part of the Trump administration’s three-part plan of “stabilisation, reconstruction and democratic transition.”

The ambitious plan developed by NABEP as part of the deal will involve investing up to $100 billion in new oil infrastructure in Venezuela. Although the South American nation has one of the largest oil reserves in the world, with an estimated 303 billion barrels of crude oil in the ground, its dilapidates and, years-old infrastructure has served as one of the biggest hindrances in the Venzuelan oil industry’s elevation. As a result, the country has held the minimal ability to produce about just 1% of the world’s oil, according to the Associated Press.

Compared to Venezuela’s over 300 billion barrels, the US has less than 50 billion barrels, according to the US Energy Information Administration.

Trump has long been pushing to boost Venezuelan oil production and take control since then-president Nicolas Maduro was forcefully captured by US forces on federal narcoterrorism and drug trafficking charges in January. Given US companies’ past failed attempts in the South American country, they haven’t expressed much enthusiasm about Trump’s plans.

Days after Maduro was raided in January, Darren Woods, the CEO of one of the biggest US oil companies, ExxonMobil, said at the White House that he deemed Venezuela “uninvestable.” He even emphasised that when they first attempted to get into Venezuela in the 1940s, their assets were seized twice.

“To reenter a third time would require some pretty significant changes from what we’ve historically seen here and what is currently the state,” he said at the time.

“The U.S. government’s robust governance and audit provisions, along with the Trump Administration’s banking reform, payment oversight and financial monitorship, will ensure tax and royalty payments are spent in the interests of the Venezuelan people,” the White House said Monday.

Apprehensions about US prices going down

Experts believe that the development of the Venezuelan oil industry will take years. Therefore, there will be no immediate respite from price hikes in the US.

Patrick De Hann, the head of petroleum analysis at GasBuddy, said, “While the hope of lower gas prices sounds promising, it still will take billions [of dollars] of investment to get that oil,” according to ABC News.

Adding another layer of uncertainty, he also stressed that the 65 billion barrels of oil Trump mentioned is only what geologists claim “may” be in the country.

In a Monday research note, the analyst added that the US-Venezuela oil deal announcement is “a signal that the White House remains concerned about elevated fuel prices — though in reality, any benefits from increased Venezuelan output will take years to fully materialise and are unlikely to move the needle in the near term.”

As quoted by ABC News, Tom Kloza, the chief energy advisor for the oil company Gulf Oil, said, “It’s not going to result in cheaper gasoline, diesel or jet fuel prices over the next five days, five weeks or five months. It’s just not. It could have some impact, but it’s probably four or five years down the road.”

Kloza also maintained that extracting Venezuelan oil, compared to the Oil the US gets from elsewhere, makes things more difficult because it is “very viscous and thick,” and “very difficult to bring to the ground.”

Similarly, Global Energy Monitor, a nonprofit that tracks energy infrastructure, shared in its Monday report that while tapping Venezuelan oil could lead to more oil coming to the US, new fields can take 15 years post-discovery for oil production.

Tracy Shuchart, CEO of commodity analytics firm Hilltower Resource Advisors, offered a similar timeline of over 15 years in a social media post.