BAKU, Azerbaijan, August 29. The agreement
between the United States and Venezuela under which the US side
would gain majority control over more than 65 billion barrels of
proven oil reserves could become not only Washington’s largest
energy deal, but also a new tool for influencing global oil
prices.
The agreement takes on particular significance against the
backdrop of the ongoing war in Ukraine and the escalation
surrounding Iran, both of which are increasing uncertainty in
energy markets and making prices more sensitive to potential
changes in supply volumes. In this context, control over
Venezuela’s resources – the country with the world’s largest proven
oil reserves – gives the U.S. the ability to influence crude oil
supply beyond its own borders.
U.S. President Donald Trump called the agreement “the biggest
oil deal in world history.”
“The United States of America has just entered into an Agreement
with the Country of Venezuela on, the biggest oil deal in world
history! ... we secured majority U.S. control of more than 65
billion barrels of proven Oil Reserves in Venezuela, at no cost to
the American Taxpayer,” Trump wrote on Truth Social.
The scale of the announced agreement is particularly striking
when compared with Venezuela’s overall reserves. According to
available data, the country holds around 303 billion barrels of
proven oil reserves. This means the deal would give the U.S.
control over more than one-fifth of this enormous resource
base.
From reserves to control over supply
Until now, U.S. influence on the global energy market has
largely been based on domestic production, while a substantial
share of the world’s largest oil resources remained outside direct
American control.
The Venezuelan agreement changes this dynamic. Under the
announced terms, the U.S. side could receive around a 55% effective
production entitlement from the development of 17 strategic fields.
The concessions are reportedly structured for 100 years, while the
U.S. side would have the right to guaranteed offtake of oil at
cost.
It is this combination of factors that gives the agreement
broader geopolitical significance. The U.S. would gain not simply
access to Venezuelan oil, but a long-term mechanism for
participating in the management of its production and supply.
At the same time, Venezuela’s current production remains far
below the potential implied by its resource base. The country
produces around 1.25 million barrels of oil per day despite holding
approximately 303 billion barrels of proven reserves. Years of
underinvestment, sanctions, aging infrastructure and technological
constraints have prevented Venezuela from realizing a significant
portion of its potential.
This is where the main strategic interest for the U.S. emerges.
If American capital can restore infrastructure and increase
production, additional volumes of oil could enter the global
market, with those resources effectively falling within the sphere
of U.S. influence.
A new lever against OPEC
This could also alter the balance of power surrounding OPEC.
OPEC and OPEC+ currently retain significant influence over the
global oil market through their ability to coordinate production
levels. Supply restrictions by major producers can support prices,
while increased output, conversely, puts downward pressure on
quotations.
U.S. control over part of Venezuela’s oil potential would give
Washington an additional lever against such policies. The faster
Venezuelan production can be restored, the greater the U.S. ability
to influence global oil supply volumes.
This is particularly relevant amid the conflicts in Ukraine and
around Iran. Any reduction in supplies from other regions could
have a stronger impact on prices when the market is already facing
constrained supply. The ability to rapidly increase Venezuelan
production in such circumstances would therefore represent a
strategic advantage for Washington.
Trump has already directly linked the agreement to energy
prices. According to him, the “historic transaction” more than
doubles U.S. oil reserves, significantly increases oil supplies and
“will dramatically lower gasoline prices for all Americans for many
years to come.”
Of course, the reserves themselves do not mean that
corresponding volumes will immediately reach the market. Restoring
production will require substantial investment and infrastructure
modernization. In the long term, however, the ability to increase
output could become the main factor behind U.S. influence over
global supply.
Venezuela and the future of OPEC
Another question concerns Venezuela’s future within OPEC. If
U.S. companies indeed become the dominant force in key segments of
Venezuela’s oil industry, Caracas’ interests as a producer could
gradually diverge from OPEC policy. In such a scenario, Venezuela’s
eventual withdrawal from the organization cannot be ruled out.
Venezuela holds the world’s largest proven oil reserves, and its
departure would represent more than simply the loss of one member
for the organization. It would mean that a significant share of the
country’s future production potential could come under the
influence of a state outside the cartel.
The potential gap between current and future production is
particularly important here. Venezuela currently produces around
1.25 million barrels per day, but U.S. investment could
significantly increase that figure. In that case, the country’s
impact on the global market would be determined not by its current
output, but by how quickly it can realize its resource
potential.
China and Russia risk losing ground
Another potential consequence of the agreement could be a shift
in the positions of China and Russia in Venezuela’s energy
sector.
In recent years, Beijing and Moscow have strengthened their
positions in the country, using the oil sector as a foundation for
economic and political cooperation. China has provided financing to
Caracas and maintained a significant interest in Venezuelan oil,
while Russian companies have participated in energy projects and
maintained close ties with the country’s oil industry.
The transfer of key assets under U.S. control could create
conditions for a gradual reduction in this presence. If U.S.
companies become the main investors in restoring Venezuelan
production, Washington would gain not only an economic advantage
but also an opportunity to push competing external powers out of
one of the Western Hemisphere’s most important energy centers.
For China, this could mean reduced access to Venezuelan heavy
crude and investment opportunities. For Russia, it could weaken its
economic and political presence in a country that has long been one
of its key partners in Latin America.
$100 billion in investment as the foundation of a new
oil reality
For Venezuela itself, the agreement could provide a source of
funding for the recovery of its oil industry. Under the announced
parameters, the deal could attract more than $100 billion in
private investment and generate more than $209 billion in tax
revenues.
These funds would be needed to modernize oil fields, pipelines,
port infrastructure and refining capacity. Venezuela’s heavy crude
requires specialized technologies, while a significant portion of
the country’s infrastructure needs rehabilitation following years
of declining investment.
This is why the deal’s impact on global markets will not be
immediate. However, if successfully implemented, it could create a
new source of additional oil supplies for decades to come.
Ultimately, the significance of the agreement is determined not
only by the 65 billion barrels that Trump said would come under
U.S. control. More important is the fact that the US would gain
potential access to part of the resource base of a country with
total proven reserves of around 303 billion barrels and the ability
to influence the development of its oil production.
Against the backdrop of the war in Ukraine and the conflict
surrounding Iran, this factor takes on particular importance.
Washington would gain an additional tool for influencing global oil
supply at a time when the ability to control energy flows is
becoming one of the key elements of geopolitical power.
If US companies succeed in restoring Venezuelan production and
raising it to a significantly higher level, the US could find
itself in a position to influence the global oil market
simultaneously through its own production and through Venezuela’s
resource base.
This could become the agreement’s main long-term consequence:
Washington would gain leverage capable of narrowing OPEC’s room for
maneuver on pricing policy, reshaping Venezuela’s position within
the oil cartel, and at the same time reducing China’s and Russia’s
influence in Venezuela’s energy sector.
Trump’s description of the agreement as the “biggest oil deal in
history” could ultimately prove significant not so much because it
involves the acquisition of reserves, but because it could reshape
the balance of influence in the global oil market.
