The U.S. Venezuela oil deal won't lower your gas prices. Here's what you need to know

U.S. and Venezuela Reach Joint Venture Agreement on Oil Development

The Trump administration announced an agreement with the Venezuelan government on Friday to develop a portion of Venezuela's oil reserves through a joint venture. The U.S. government would hold a 55 percent stake in the venture, equivalent to rights over approximately 65 billion barrels of oil reserves, according to an official who spoke to NPR on the condition of anonymity.

President Trump described the arrangement on Truth Social as the "biggest oil deal in the world." The deal includes a 100-year lease framework and targets more than $100 billion in investment, with the stated goal of reaching 1.5 million barrels per day of production. Output is designated for delivery to the U.S. Strategic Petroleum Reserve and military use.

Energy analysts have raised questions about the timeline and commercial structure. Paasha Mahdavi, associate professor of political science at UC Santa Barbara, said initial reactions often focus on the scale of the announcement, but closer examination shows production would require years of development. Francisco Monaldi, director of the Latin America Energy Program at Rice University's Center for Energy Studies, noted that many fields involved remain largely undeveloped.

The United States lacks a national oil company comparable to Saudi Aramco or Mexico's Pemex. Gerald Kepes, president of Competitive Energy Strategies, said the absence of government-owned operational capacity raises questions about execution on the ground. A private Venezuelan company is listed as a partner in the venture, though details on operational roles remain unspecified.

The agreement provides the U.S. share at production cost plus a fixed margin. Mahdavi said such terms limit the potential for companies to benefit from price spikes above cost, which can reduce investor interest in volatile markets. Some U.S. oil companies have expressed preliminary interest in portions of the government stake, but participation remains uncertain.

The deal was negotiated with acting President Delcy Rodríguez, who assumed office after the U.S. seizure and arrest of former President Nicolás Maduro in January. Rodríguez addressed the nation on Saturday, stating the arrangement would benefit Venezuelans. Some domestic critics have questioned whether the revenue split favors Venezuela adequately. Kepes said oil companies will likely examine the government's long-term stability when assessing contract enforceability over three to five years.

Current U.S. gasoline prices stand at approximately $4.09 per gallon amid supply disruptions linked to the ongoing Iran conflict. Trump stated on Truth Social that the Venezuelan deal would substantially lower prices for American consumers. Monaldi said any production increase from the fields would take several years and is unlikely to affect global markets in the near term. Kepes described near-term effects on retail prices as improbable given the development schedule.

The arrangement marks a shift from prior U.S. policy toward Venezuela. Officials have not released the full text of the agreement or detailed how the 55 percent share will be allocated between government reserves and commercial partners. Further clarification on investment commitments and production milestones is expected in coming weeks.