US-Venezuela Oil Deal Reshapes Global Supply; Market Awaits First Test Monday

Markets will face their first test Monday after President Donald Trump announced late Friday that the United States has secured majority control of more than 65 billion barrels of Venezuela’s proven oil reserves. The deal was unveiled after the close of trading, meaning no market reaction can be honestly attributed to it yet, according to investors monitoring the situation.

Trump described the agreement as “THE BIGGEST OIL DEAL IN WORLD HISTORY” in a social media post, according to the Associated Press. The White House has provided few additional details since the announcement.

**Deal structure and scope**

The arrangement grants U.S. interests majority control of roughly one-fifth of Venezuela’s 303 billion barrels of proven reserves — the world’s largest. Combined with U.S. proven crude reserves of about 46 billion barrels, the agreement expands U.S.-controlled resources to roughly 111 billion barrels, representing approximately 7.1% of global proven crude reserves, according to 24/7 Wall St.

Trump said the deal was negotiated by Secretary of State Marco Rubio and Defense Secretary Pete Hegseth in cooperation with Venezuelan interim President Delcy Rodriguez and private companies, and came “at no cost to the American Taxpayer,” according to multiple outlets.

Venezuelan interim President Delcy Rodriguez said the agreement will run for 25 years and target a production increase to 1.5 million barrels per day from 17 strategic oilfields in the Orinoco Belt and Lake Maracaibo regions, according to CNBC. She characterized the deal as “historic,” adding that the broader plan includes development of eight greenfield blocks. Rodriguez said the agreement could generate about $209 billion in tax revenue for Venezuela based on a benchmark oil price of $65 per barrel, with roughly $19 from each barrel flowing directly to the state.

U.S. and Venezuelan officials said the agreement could attract nearly $100 billion in private investment, with Rubio calling it a “win-win” that would provide a stable source of lower-cost crude for the United States while helping Venezuela attract investment, create jobs and rebuild its economy, according to multiple reports.

**Impact on gas prices and Strategic Petroleum Reserve**

Trump said oil from Venezuela will be used to replenish the Strategic Petroleum Reserve, which was drawn down heavily in recent years, according to NDTV Profit. “One of the things I am going to do with the Venezuelan Oil is fill up the Strategic National Reserves,” Trump wrote on Truth Social, adding that the process would begin shortly.

However, analysts caution that near-term relief at the pump is unlikely. Venezuela’s crude is predominantly extra-heavy oil that requires diluents, specialized refining and major infrastructure repairs after years of underinvestment, according to 24/7 Wall St. Even with rapid investment, meaningful incremental supply will take time to reach global markets.

A U.S. official told NDTV Profit that the arrangement involves an experienced private operator in Venezuela, and that as production increases, oil supplied at cost could be directed toward the SPR and meeting U.S. military requirements. U.S. Gulf Coast refiners such as Marathon Petroleum and Valero Energy already process a large share of Venezuelan crude and stand to benefit from more reliable volumes, but the deal does not create an immediate flood of light sweet crude that would pressure gasoline prices lower in the coming months, according to 24/7 Wall St.

**Production challenges and legal hurdles**

Venezuela currently produces only about 1.25 million barrels per day — far below its historic peaks above 3 million — after years of underinvestment, mismanagement and sanctions. Rodriguez said the 1.5 million bpd target under the bilateral agreement is an initial goal.

Analysts have questioned how quickly the agreement could translate into higher production. David Goldwyn, president of Goldwyn Global Strategies, told Daily Sabah that the legal basis for a U.S. government lease to operate Venezuelan oil fields was unclear and that there is no established precedent for such an arrangement. He also questioned whether the deal would overcome the political, infrastructure and regulatory problems that have discouraged major investment.

According to CGTN, citing Reuters, sources have said that a lease model is under consideration with fields potentially auctioned to U.S. producers, but the arrangement could face legal and constitutional challenges in Venezuela, where the state retains control over core oil industry activities. A list reviewed by Reuters identified fields in the Orinoco Belt and Lake Maracaibo regions.

Venezuelan officials are preparing to sign agreements next week granting new oil exploration and production rights to several companies, including U.S. firms, according to multiple reports. Two sources close to the negotiations told CNBC that Chevron was among the companies expected to finalize talks to transition its Venezuelan joint ventures into the new energy framework. Chevron already operates the largest U.S. footprint in the country and is finalizing contract migrations under the new hydrocarbons framework, according to 24/7 Wall St. Service provider SLB has also secured early contracts for technology and equipment, the outlet reported.

**Next steps**

Rodriguez said the country retained “ownership of and sovereignty” over its natural resources while leveraging foreign capital, technology and operational expertise. Dozens of pro-government groups gathered in downtown Caracas on Saturday to protest against the U.S. presence, according to CNBC.

The timing and scale of deliveries remain unclear. Analysts emphasize that rebuilding production capacity will take years rather than quarters. The agreement gives Washington a potentially significant foothold in Venezuela’s energy sector, but its economic impact will depend heavily on how the arrangement is structured, whether it survives legal challenges and how quickly investment flows to repair damaged infrastructure.

Monday’s trading session will provide the first market-based assessment of the deal’s significance.