U.S. President Donald Trump announced in a social media post last week that his administration had struck “THE BIGGEST OIL DEAL IN WORLD HISTORY,” taking some form of direct ownership over an estimated 65 billion barrels of oil reserves in Venezuela. Details of the agreement have not been released, but according to The Wall Street Journal, it calls for the U.S. Department of Defense to take a passive, 35 percent stake in North American Blue Energy Partners (NABEP), a private company led by Venezuelan oligarch Alejandro Betancourt.
Betancourt is close to interim Venezuelan President Delcy Rodriguez and has become a key fixer for the Trump administration in recent months, but he also has a checkered past: He owes his fortune in part to no-bid contracts that his companies were awarded under former President Hugo Chavez, and he has been investigated for money laundering in Switzerland and Spain. He has been arrested twice in the United Kingdom in 2025 on warrants from both countries, though he has never been criminally charged in any jurisdiction. The Washington Post reported last week that the Trump administration pressured Switzerland to drop its case, and also lobbied the U.K. government to lift travel restrictions on Betancourt.*
Under the deal that Trump negotiated with Rodriguez, NABEP would reportedly be able to develop 17 oil fields containing one-fifth of the country’s proven reserves, and the U.S. would have preferential rights to purchase 20 percent of the company’s output at cost.
The announcement was far from a surprise and represents a natural step that the U.S. government has been plodding toward for months. Trump has long been focused on the idea of seizing control of Venezuela’s oil—the largest proven crude reserves in the world. He even told reporters on Jan. 3, following the military operation that snatched then-President Nicolas Maduro from Caracas, “we’re gonna take back the oil that, frankly, we shoulda taken back a long time ago.” In early August, regarding oil in Venezuela, Trump bragged that he was managing the governance of Venezuela “the old-fashioned way; to the victor belong the spoils.”
Trump’s comments about controlling Venezuela have gone beyond oil. The U.S. president, who has approached the Western Hemisphere with an expansionist mindset since his return to office last year, has treated Venezuela as a territory that his government and military now oversee. He has posted photos to social media with a U.S. flag superimposed on Venezuela and suggested it should be the 51st state. Various media outlets have reported that Secretary of State Marco Rubio essentially runs Venezuela, describing his role in the country as that of a colonial-era viceroy.
From a political risk perspective, any private company looking to invest in Venezuela right now for the long term must consider whether the deal Trump made with Rodriguez will stick.
However, Trump’s announcement that the U.S. now controls billions of barrels of Venezuela’s oil feels more like a 100-day gambit than a 100-year lease. Midterm elections that will be a referendum on his presidency are less than three months away, and Trump faces a stagnant situation in the Strait of Hormuz that has driven up oil prices. He needs to redirect focus to a foreign policy “win” and demonstrate that he is doing something to give American voters relief at the pump. Announcing the doubling of U.S. oil reserves would seem to be one way to signal that.
Unfortunately for Trump, influence over the regime in Caracas and ostensible ownership over a share of the oil buried underground won’t translate to lower gas prices anytime soon. Rodriguez has said the agreement with Washington will last 25 years and aims to raise oil production in Venezuela to 1.5 million barrels a day. But the country currently produces only 1.2 million barrels per day and will struggle to significantly boost that under nearly any scenario for at least several years.
For the largest U.S. oil companies, Venezuela remains “uninvestable,” as the CEO of ExxonMobil told Trump at a White House meeting earlier this year. The country’s electrical utility can’t keep the lights on, and the lack of rain caused by this year’s El Niño will further dry up the hydroelectric reservoirs. Much of rural Venezuela, including parts of oil-producing Zulia state, remains controlled by armed groups, while the security forces remain underpaid and understaffed. Caracas owes an estimated $240 billion—more than twice the country’s GDP—which is about to become the largest debt restructuring in history. That means any oil profits will be disputed in some way.
Even if all those challenges are overcome, from a political risk perspective, any private company looking to invest in Venezuela right now for the long term must consider whether the deal Trump made with Rodriguez will stick. Based on what’s been reported, the deal certainly goes against the will of Venezuela’s public and likely violates the constitution. Those facts may be largely meaningless today—after all, the country is ruled by an unelected dictatorship that has broken all the rules and violated the public’s will for over a decade—but any future government could take serious issue with the terms of the Trump-Rodriguez deal. The questions lingering over its legitimacy, and how the rules may change yet again under a future administration, will hold back oil extraction projects across the country.
Former Venezuelan President Hugo Chavez, who proudly took over the oil assets of Exxon and ConocoPhillips in Venezuela, was known to walk through the streets during his weekly television show, point at private buildings, and yell “Exprópiese!” (Expropriate it!) Chavez believed that his rewriting of the Venezuelan constitution and his expropriations of oil fields were part of a political revolution that would keep Venezuelan oil in the hands of the government and people. Trump should learn a lesson from the late comandante: loudly announcing that something has been taken over does not mean it will be true when the next leader comes along.
*Editor’s note: The original version of this article incorrectly stated that the Trump administration pressured the U.S. Justice Department to drop an investigation of Betancourt. WPR regrets the error.
James Bosworth is the founder of Hxagon, a firm that does political risk analysis and bespoke research in emerging and frontier markets. He has two decades of experience analyzing politics, economics and security in Latin America and the Caribbean.