Representatives of the Donald Trump administration are working on a deal that would secure the US long-term access to part of Venezuela’s crude oil reserves. This was reported by Reuters on August 27 by sources familiar with the negotiations. According to them, such a deal could potentially reduce the cost of oil imports for the United States.
The agreement is expected to be signed and announced in the near future. According to Reuters sources, it may involve securing a group of Venezuelan oil fields for the US government, which will be developed by American companies. The oil extracted from them is expected to be guaranteed to be supplied to the United States.
“This is a real deal being discussed at the highest levels of the US and Venezuela governments”, one of the Reuters sources said. Another source reported that the legal model being considered for the implementation of the agreement is a “lease,” after which each field could be allocated among American producers through an auction or tender.
The list of 17 fields under negotiation, seen by Reuters, includes new plots in the vast Orinoco oil belt and mature fields in Lake Maracaibo. Some of them are currently operated by a small Chinese company, which was contracted under the administration of Nicolas Maduro.
The White House referred requests for comment on the negotiations to the US Department of Energy. The Venezuelan Ministry of Oil, the state oil company PDVSA, and the US Department of Energy did not respond to requests for comment. Minister of Oil of Venezuela Paula Enao could also not be reached.
Venezuela considers leaving OPEC
Venezuela is considering the possibility of leaving OPEC amid strengthening ties with the US, reported by Bloomberg late in the evening of August 27. Venezuela, which was one of the founders of the organization in 1960, has not met OPEC quotas for years, as its state oil industry has suffered from neglect and corruption. The US has long opposed OPEC’s influence on global oil prices.
Venezuela has the largest crude oil reserves in the world. The country’s current hydrocarbon legislation does not provide for the leasing of oil plots, and the Constitution leaves key activities in this industry to the state. At the same time, the recently reformed oil legislation allows the development of fields through joint ventures and production sharing agreements.
For decades, the government of Venezuela has prevented foreign producers from accessing the country’s oil reserves. The full details of the potential agreement between Washington and Caracas have not yet been disclosed, but experts believe it could raise constitutional issues and face legal challenges.
US plans and pressure on the Trump administration
The agency Axios was the first to report on the negotiations on August 27. According to its data, US Energy Secretary Chris Wright plans to visit Caracas as early as next week.
After the US captured and removed former President Nicolas Maduro from power in January, Washington has been trying to secure stable supplies of Venezuelan crude oil for American refineries, while encouraging American investment in the country’s ailing energy sector. Currently, Venezuela produces about 1.25 million barrels of crude oil per day.
The administration of President Donald Trump is under pressure ahead of the midterm elections scheduled for the end of this year due to rising gasoline prices. These could be contained through cheaper oil supplies and increased production.
The US is also looking for ways to replenish its Strategic Petroleum Reserve (SPR), including considering the possibility of exchanging crude oil with American producers. Currently, the SPR contains about 290 million barrels in underground salt caves — approximately 41% of its total capacity.
A lack of funding and current maintenance of the reserve have limited the administration’s ability to replenish it after the US used the reserves following Russia’s invasion of Ukraine in 2022, and again after the start of the war with Iran in February.
Source: The Straits Times (based on Reuters materials)
