Venezuela Oil Deal Moves From Truth Social Post to Signed Contracts in Caracas

Since President Trump's August 29 announcement that the U.S. secured majority interest in 65 billion barrels of Venezuelan oil, the deal has moved from a Truth Social post to a real signing spree in Caracas.

U.S. Energy Secretary Chris Wright traveled to Venezuela's capital this week and met with Venezuelan Vice President Delcy Rodríguez to finalize terms, according to the Daily Signal citing Reuters. The Department of Energy says Wright oversaw the signing of energy agreements between Venezuela and Chevron, Eni, and GE Vernova covering expanded oil production and modernization of the country's power grid.

Chevron is putting more than $7 billion into Venezuela over the next five years, according to OilPrice.com, with plans to more than double its production there to around 600,000 barrels per day. Separately, U.S.-backed North American Blue Energy Partners has taken majority control of a company holding long-term concessions in the country, OilPrice reported.

What Trump Actually Announced

Trump's original claim was that the U.S. gained control of 65 billion barrels. The real mechanics are narrower. A U.S. official told the Associated Press, as reported by Fox News, that the agreement gives Washington a 55% effective interest in the output of a newly formed private company managing 17 Venezuelan fields, not direct ownership of the reserves themselves. Of the 65 billion barrels cited, 35.75 billion aren't immediately accessible under the deal.

Delcy Rodríguez, in a weekend address carried by state broadcaster VTV and reported by the Daily Signal, said the arrangement runs 25 years and targets 1.5 million barrels per day from those 17 fields, with development of eight additional greenfield blocks on top of that. She projected roughly $209 billion in state revenue based on a $65-per-barrel benchmark, with about $19 of every barrel flowing directly to the Venezuelan government.

Trump also said on Truth Social that Venezuelan oil will help refill the Strategic Petroleum Reserve, which the Energy Information Administration says had fallen to about 289 million barrels as of the week ending August 21, down from 656 million barrels in July 2020. The Trump administration drew down 172 million barrels from the reserve in March amid the ongoing war with Iran.

Cabello's Pitch to a Skeptical Base

Venezuelan Interior Minister Diosdado Cabello, whom Breitbart describes as a longtime suspected drug trafficker, spent Wednesday's episode of his state propaganda program defending the deal to Chavistas who spent years hearing that not a drop of Venezuelan oil should go to the United States. Cabello told viewers the agreement includes clear royalty rates and taxes favorable to Venezuela, and pointed to a reported $100 billion in investment over 25 years. He argued the arrangement fits plans the late Hugo Chávez himself once floated to push output toward four to six million barrels a day.

That conflicts with Venezuela's actual production history. The country pumped as much as 3.2 million barrels a day in the early 2000s, according to Breitbart, but now produces only about 1.25 million bpd, according to the Daily Signal, despite sitting on roughly 17% of the world's proven reserves and holding a mere 1% share of global output, according to the Daily Wire.

The Case for Skepticism

Venezuela has promised oil-boom prosperity before and delivered mismanagement instead. The Energy Information Administration warned in October 2023, after the Biden administration eased sanctions, that "years of underinvestment and mismanagement" would limit any recovery, a point Fox News highlighted in its own coverage. Rystad Energy estimated in July that Venezuelan output could rise only 17% by 2028, and only with heavy new drilling, workover campaigns, and far more rig availability. Venezuelan crude is also unusually heavy, once described by S&P Global as having "the viscosity of asphalt," meaning it needs a steady diluent supply just to move through pipelines.

The Daily Wire also flagged that Trump did not name the private businesses involved in the deal or explain how the U.S. would exercise majority control over the new entity, an accountability gap that hasn't closed since the initial announcement.

The Backdrop: Iran and Gas Prices

The deal lands against a war with Iran that has pushed U.S. pump prices to roughly $4.07 to $4.08 a gallon, up from about $3.19 to $3.20 a year earlier, according to AAA figures cited by both Fox News and the Epoch Times. Vice President JD Vance said this week the U.S. will not negotiate with Iran while it continues attacking commercial shipping through the Strait of Hormuz, according to OilPrice.com, which reported more than 70 attacks on tankers since the conflict began and roughly $2 billion in war-risk insurance claims piling up with insurers.

Whether Venezuelan barrels ever offset that pressure depends on infrastructure and investment that, by every outside estimate in these reports, will take years to build. The open question is whether the ownership terms Trump has not yet detailed, and the $100 billion and $209 billion figures Caracas is citing, hold up once the contracts move from signing ceremonies to actual barrels reaching U.S. refineries.