US-Venezuela Oil Deal Raises Questions About Long-Term Stability

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US-Venezuela Oil Deal Raises Questions About Long-Term Stability

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The White House announced on August 31, 2026, details of a new oil agreement with Venezuela, described by President Trump as “the biggest oil deal in world history.” The deal grants the US government significant control over approximately 65 billion barrels of proven oil reserves in Venezuela. This represents about one-fifth of Venezuela’s total proven oil reserves.

The agreement hinges on a private Venezuelan company, North American Blue Energy Partners (NABEP), which has been granted 100-year concessions to drill in 17 oil fields. The US Defense Department’s Office of Strategic Capital will receive a 35% equity stake in NABEP’s corporate parent, and the State Department will have the right to purchase 20% of NABEP’s output at production cost, with a right of first refusal for the remaining 80%. NABEP, run by Venezuelan executive Alejandro Betancourt, is currently Venezuela’s second-largest private oil producer, pumping over 200,000 barrels per day, and aims to increase daily production to over 1 million barrels.

Interim Venezuelan President Delcy Rodriguez has hailed the deal as a “historic agreement” that will attract up to $100 billion in new oil infrastructure investments and generate an estimated $200 billion in royalty and tax payments for Venezuela over the first 25 years. She emphasized that Venezuela retains ownership and sovereignty over its natural resources. However, some experts express skepticism that the deal will immediately impact US gas prices, as it could take years for new Venezuelan oil production to reach the US market. The US plans to use the crude oil to refill its Strategic Petroleum Reserve.

This agreement follows a period of eased US sanctions on Venezuela’s oil sector, which began after the capture of former Venezuelan President Nicolás Maduro in January 2026 and subsequent reforms to Venezuela’s hydrocarbons law allowing for greater private sector participation. US imports of Venezuelan crude have significantly increased, with the US now importing more than half of Venezuela’s crude oil output.

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