US Deal to Control Venezuela's Oil: What to Know

The United States announced it has secured control over a significant portion of Venezuela's vast oil reserves, following President Donald Trump's pledge to "take back" the South American nation's energy resources.

On Friday (August 28), Trump said the US government and Venezuela's interim government, led by Delcy Rodriguez, had reached an agreement giving the US control over most of the proven oil reserves, valued at over 65 billion barrels.

Specific details have not been disclosed. However, the deal involves 17 strategic oil fields in Venezuela. The US government said it would partner with a private company to extract the fuel.

"The United States of America has just signed an Agreement with the Country of Venezuela on THE BIGGEST OIL DEAL IN THE HISTORY OF THE WORLD!" — Trump wrote on social media to celebrate the announcement.

How much oil is involved?

The deal is said to involve 65 billion barrels of Venezuela's oil reserves. That figure represents about one-fifth of Venezuela's proven reserves. As of 2023, the US government estimated Venezuela had 303 billion barrels of oil reserves, the largest known deposit in the world. About 17% of the world's oil supply is estimated to be in this South American country.

However, some analysts have questioned the 65 billion barrel figure touted by Trump. With no fixed terms disclosed, speculation suggests Trump may be making a headline-grabbing announcement to help boost the US economy.

"The 65 billion barrels is a misleading figure and will have little bearing on any actual deal — the real details remain almost entirely unknown," oil market researcher Rory Johnston said on social media. "It's a classic big number that Trump will jump on and repeat ad nauseam."

How will this affect US oil supplies?

Trump said the deal would "DOUBLE THE OIL RESERVES OF THE UNITED STATES." Government estimates show US proven oil reserves are declining, at around 46 billion barrels as of the end of 2024.

The US government also operates the Strategic Petroleum Reserve, an emergency oil supply designed to ensure stable domestic supply. However, this emergency reserve is shrinking, with only 289.7 million barrels in storage facilities designed to hold up to 714 million barrels. Trump said Friday's deal would help restore US oil reserves, which have hit their lowest levels since 1982.

What led to this moment?

The year 2026 has seen rapid changes for Venezuela and its relationship with the US. Since 2013, the South American nation has been led by socialist President Nicolas Maduro, whose tenure has been defined by a series of disputed elections and crackdowns on dissent.

Trump and Maduro have clashed repeatedly, with Trump accusing the Venezuelan leader of sending drug criminals into the US, while Maduro accused Trump of foreign interference in internal politics. The conflict escalated on January 3, when US forces conducted an operation to capture and detain the Venezuelan leader. Maduro is now awaiting trial in New York on drug and weapons charges.

Trump then backed Rodriguez, a former vice president under Maduro, to lead the government in Caracas. The Trump administration also announced that Washington would take control of Venezuela's oil exports "indefinitely." Critics have noted that the Trump administration pressured Rodriguez to comply with its demands.

What is the basis for Trump's claim on Venezuela's oil?

Experts have condemned US intervention in Venezuela as illegal under international law. However, the Trump administration has made its claim on Venezuela's oil resources a central pillar of its engagement with the South American nation.

Before the January 3 attack, Trump and his allies argued that Venezuela's oil supply belonged to the US due to the history of early fuel exploration in the country. They also condemned the Venezuelan government's efforts to confiscate oil resources from private companies as part of an attempt to nationalize the fossil fuel industry.

In December, Trump announced a blockade around Venezuela to prevent the sale of oil, its largest export. His adviser, Stephen Miller, called Venezuela's nationalization of its oil industry "the greatest theft of American property and wealth." However, international law grants nations "permanent sovereignty" over their resources, protecting them from unwanted foreign exploitation.

Why announce the deal now?

Friday marked the six-month anniversary of the US-Israel war with Iran. When the war began on February 28, Iran closed the Strait of Hormuz to commercial traffic. Nearly one-fifth of the world's oil and natural gas supply once flowed through the strait before the war.

The closure led to a spike in global oil prices, including in the US, where voters will head to the polls in midterm elections in November. The American Automobile Association (AAA) forecasts this month to be the most expensive August on record for gasoline prices, with US consumers paying an average of over $4 per gallon. The dispute over the strategic waterway remains ongoing, as does the war itself. Ongoing military operations are also straining US oil supplies.

How is the Trump administration framing the new oil deal?

Trump has repeatedly praised Venezuela under Rodriguez's leadership as a model for how they want to deal with foreign adversaries like Iran. He has also touted Washington's control over Venezuela's oil supply as a boon to the US economy during the midterm election season.

"We're doing a great job in Venezuela. We're taking a lot of oil from Venezuela and we're getting along very well with them," Trump told supporters at a campaign rally in Las Vegas this month. He later claimed to have "paid for the war" against Venezuela "with what we've taken out" of the country.

"That's the classic way, right? The classic way," Trump told the crowd. "To the victor belong the spoils, right?"

In Friday's announcement of the deal, Trump pledged that the increase in US oil supplies "will substantially lower Gas Prices for all Americans." The cost of living is expected to be a key issue in this year's midterm races.

Additionally, US Secretary of State Marco Rubio, a hawkish figure, described the oil deal as a victory for Trump's "America First" platform. Rubio also insisted the deal would benefit both sides, boosting the private investment needed for "the reconstruction of Venezuela's economy."

How has Delcy Rodriguez responded to the deal?

Rodriguez also presented the deal as a victory for her administration. In a Telegram message, she called the agreement "historic" and said it would have "a significant impact on the revival of our nation."

"It will facilitate a substantial flow of investment aimed at restoring and reconstructing strategic infrastructure for the development of our hydrocarbon industry," Rodriguez wrote.

Venezuela has long struggled with an economic crisis that has caused shortages of basic goods and hyperinflation. Nearly 8 million Venezuelans have left the country since 2014 due to political repression and economic concerns. Critics point to government corruption and mismanagement of state industries, including oil and mining, as among the causes of the economic decline. Another often-cited reason is the impact of heavy US sanctions on Venezuela's economy.

Since becoming interim president, Rodriguez has led a campaign to boost private investment in Venezuelan industries, at the request of the Trump administration. Her government estimates Friday's deal will bring $209 billion in tax revenue to Venezuela, along with $100 billion in investment.

How long will the deal last?

Media reports say the Rodriguez government has granted the Trump administration access to oil reserves for 100 years.

What are the criticisms?

Washington has a long history of intervention in Latin America, and Trump has sought to assert US dominance in the Western Hemisphere as part of a policy he calls the "Donroe Doctrine." Critics describe Friday's deal as an attempt to seize Venezuela's resources, similar to what Western powers did during colonial times.

Just before the deal was announced, energy analyst Gregory Brew compared reports of the impending agreement to oil concessions sought by the British Empire in the early 20th century. "Such a thing is unprecedented," Brew wrote on social media. "The closest thing might be BP [British Petroleum] (when largely owned by the British government) claiming rights to Iraq's and Iran's oil reserves before World War II."

Trump has also embraced the colonial-era slogan "Manifest Destiny" as part of his plan for a "developing nation" to "increase wealth" and "expand territory."

Could the Venezuela model be applied elsewhere?

Trump has also mentioned the possibility of claiming oil reserves in other parts of the world. Since 2011, before his election, he has suggested that the US should use military force to extract oil from other countries.

"I would take the oil," Trump said about US military intervention in Libya. That same year, he repeated this sentiment about the US occupation of Iraq.

In his second term, Trump has expressed similar intentions toward Iran. In April, he posted on social media: "With a little more time, we could easily OPEN THE STRAIT OF HORMUZ, TAKE THE OIL AND MAKE A FORTUNE." He has also proposed making the Strait of Hormuz US territory.