BAKU, Azerbaijan, August 29. The agreement between the United States and Venezuela under which the US side would gain majority control over more than 65 billion barrels of proven oil reserves could become not only Washington’s largest energy deal, but also a new tool for influencing global oil prices.
The agreement takes on particular significance against the backdrop of the ongoing war in Ukraine and the escalation surrounding Iran, both of which are increasing uncertainty in energy markets and making prices more sensitive to potential changes in supply volumes. In this context, control over Venezuela’s resources – the country with the world’s largest proven oil reserves – gives the U.S. the ability to influence crude oil supply beyond its own borders.
U.S. President Donald Trump called the agreement “the biggest oil deal in world history.”
“The United States of America has just entered into an Agreement with the Country of Venezuela on, the biggest oil deal in world history! ... we secured majority U.S. control of more than 65 billion barrels of proven Oil Reserves in Venezuela, at no cost to the American Taxpayer,” Trump wrote on Truth Social.
The scale of the announced agreement is particularly striking when compared with Venezuela’s overall reserves. According to available data, the country holds around 303 billion barrels of proven oil reserves. This means the deal would give the U.S. control over more than one-fifth of this enormous resource base.
From reserves to control over supply
Until now, U.S. influence on the global energy market has largely been based on domestic production, while a substantial share of the world’s largest oil resources remained outside direct American control.
The Venezuelan agreement changes this dynamic. Under the announced terms, the U.S. side could receive around a 55% effective production entitlement from the development of 17 strategic fields. The concessions are reportedly structured for 100 years, while the U.S. side would have the right to guaranteed offtake of oil at cost.
It is this combination of factors that gives the agreement broader geopolitical significance. The U.S. would gain not simply access to Venezuelan oil, but a long-term mechanism for participating in the management of its production and supply.
At the same time, Venezuela’s current production remains far below the potential implied by its resource base. The country produces around 1.25 million barrels of oil per day despite holding approximately 303 billion barrels of proven reserves. Years of underinvestment, sanctions, aging infrastructure and technological constraints have prevented Venezuela from realizing a significant portion of its potential.
This is where the main strategic interest for the U.S. emerges. If American capital can restore infrastructure and increase production, additional volumes of oil could enter the global market, with those resources effectively falling within the sphere of U.S. influence.
A new lever against OPEC
This could also alter the balance of power surrounding OPEC. OPEC and OPEC+ currently retain significant influence over the global oil market through their ability to coordinate production levels. Supply restrictions by major producers can support prices, while increased output, conversely, puts downward pressure on quotations.
U.S. control over part of Venezuela’s oil potential would give Washington an additional lever against such policies. The faster Venezuelan production can be restored, the greater the U.S. ability to influence global oil supply volumes.
This is particularly relevant amid the conflicts in Ukraine and around Iran. Any reduction in supplies from other regions could have a stronger impact on prices when the market is already facing constrained supply. The ability to rapidly increase Venezuelan production in such circumstances would therefore represent a strategic advantage for Washington.
Trump has already directly linked the agreement to energy prices. According to him, the “historic transaction” more than doubles U.S. oil reserves, significantly increases oil supplies and “will dramatically lower gasoline prices for all Americans for many years to come.”
Of course, the reserves themselves do not mean that corresponding volumes will immediately reach the market. Restoring production will require substantial investment and infrastructure modernization. In the long term, however, the ability to increase output could become the main factor behind U.S. influence over global supply.
Venezuela and the future of OPEC
Another question concerns Venezuela’s future within OPEC. If U.S. companies indeed become the dominant force in key segments of Venezuela’s oil industry, Caracas’ interests as a producer could gradually diverge from OPEC policy. In such a scenario, Venezuela’s eventual withdrawal from the organization cannot be ruled out.
Venezuela holds the world’s largest proven oil reserves, and its departure would represent more than simply the loss of one member for the organization. It would mean that a significant share of the country’s future production potential could come under the influence of a state outside the cartel.
The potential gap between current and future production is particularly important here. Venezuela currently produces around 1.25 million barrels per day, but U.S. investment could significantly increase that figure. In that case, the country’s impact on the global market would be determined not by its current output, but by how quickly it can realize its resource potential.
China and Russia risk losing ground
Another potential consequence of the agreement could be a shift in the positions of China and Russia in Venezuela’s energy sector.
In recent years, Beijing and Moscow have strengthened their positions in the country, using the oil sector as a foundation for economic and political cooperation. China has provided financing to Caracas and maintained a significant interest in Venezuelan oil, while Russian companies have participated in energy projects and maintained close ties with the country’s oil industry.
The transfer of key assets under U.S. control could create conditions for a gradual reduction in this presence. If U.S. companies become the main investors in restoring Venezuelan production, Washington would gain not only an economic advantage but also an opportunity to push competing external powers out of one of the Western Hemisphere’s most important energy centers.
For China, this could mean reduced access to Venezuelan heavy crude and investment opportunities. For Russia, it could weaken its economic and political presence in a country that has long been one of its key partners in Latin America.
$100 billion in investment as the foundation of a new oil reality
For Venezuela itself, the agreement could provide a source of funding for the recovery of its oil industry. Under the announced parameters, the deal could attract more than $100 billion in private investment and generate more than $209 billion in tax revenues.
These funds would be needed to modernize oil fields, pipelines, port infrastructure and refining capacity. Venezuela’s heavy crude requires specialized technologies, while a significant portion of the country’s infrastructure needs rehabilitation following years of declining investment.
This is why the deal’s impact on global markets will not be immediate. However, if successfully implemented, it could create a new source of additional oil supplies for decades to come.
Ultimately, the significance of the agreement is determined not only by the 65 billion barrels that Trump said would come under U.S. control. More important is the fact that the US would gain potential access to part of the resource base of a country with total proven reserves of around 303 billion barrels and the ability to influence the development of its oil production.
Against the backdrop of the war in Ukraine and the conflict surrounding Iran, this factor takes on particular importance. Washington would gain an additional tool for influencing global oil supply at a time when the ability to control energy flows is becoming one of the key elements of geopolitical power.
If US companies succeed in restoring Venezuelan production and raising it to a significantly higher level, the US could find itself in a position to influence the global oil market simultaneously through its own production and through Venezuela’s resource base.
This could become the agreement’s main long-term consequence: Washington would gain leverage capable of narrowing OPEC’s room for maneuver on pricing policy, reshaping Venezuela’s position within the oil cartel, and at the same time reducing China’s and Russia’s influence in Venezuela’s energy sector.
Trump’s description of the agreement as the “biggest oil deal in history” could ultimately prove significant not so much because it involves the acquisition of reserves, but because it could reshape the balance of influence in the global oil market.
