The United States, Venezuela Sign Strategic Oil Deal

The bilateral US-Venezuela energy agreement to develop 65 billion barrels of Venezuelan oil reserves and expand offshore natural gas operations shifts Latin American energy trade and supply dynamics. The resulting expansion in regional crude and natural gas output creates heightened market competition for state energy producers like PEMEX while reshaping regional investment flows across energy, infrastructure, and international trade sectors. This strategic opening under Venezuela's reformed Hydrocarbons Law redefines private sector participation and trade corridors for multinational energy operators active in Latin America.

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The governments of the United States and Venezuela announced a bilateral energy agreement to develop strategic oil reserves in Venezuela. According to both administrations, the initiative aims to lower US fuel prices while providing essential funding to upgrade Venezuela's legacy energy infrastructure.

Statements from both sides confirm that the arrangement focuses on the development of 17 strategic oil fields with an estimated potential of 65 billion b of crude. The initiative seeks to expand crude production through partnerships with private sector operators. According to figures provided by Venezuelan officials, the project anticipates more than US$100 billion in direct investment into domestic energy infrastructure and is projected to generate over US$209 billion in state tax revenues. 

Acting President Delcy Rodríguez projected that total state revenues could reach approximately $209.335 billion, based on an assumed benchmark price of US$65/b. Under this fiscal framework, roughly US$19/b produced and sold would go directly to the Venezuelan state. Rodríguez noted that the strategy includes developing eight greenfield blocks in the Orinoco oil belt under terms featuring a minimum 16% royalty and a 34% income tax.

“This 25-year binational project includes developing strategic sectors aimed at producing over 1.5MMb/d. This only applies within the scope of the bilateral agreement between Venezuela and the United States. But our goal is being further pursued by bringing in more players. Important agreements include big companies like Chevron, Repsol, Eni, Shell, BP, among others,” Rodríguez highlighted. 

According to Trump, the negotiations involved key officials from both administrations, including US Secretary of State Marco Rubio, US Secretary of War Pete Hegseth, and Rodríguez. Trump stated that the deal grants the United States majority control over the designated 65 billion b of reserves via a public-private partnership structure. The US administration framed the agreement as a step to increase domestic energy supplies, reduce consumer fuel prices, and expand national reserve capacity without requiring direct taxpayer funding. 

“This Historic transaction more than doubles American oil reserves, greatly increases our oil supply, and will substantially lower gas prices for all Americans, long into the future, while helping to continue to set Venezuela on a course toward tremendous success and great prosperity. This transaction will greatly strengthen the already growing relationship between Venezuela,” reads Trump's post on Truth Social.

Venezuelan leadership emphasized that the agreement forms part of a broader effort to modernize national infrastructure, boost domestic employment, and stabilize international energy markets through increased output. Both governments characterized the transaction as a central element in the restructuring of bilateral diplomatic and economic relations. 

While the agreement is presented as a transformative partnership for both nations, an analysis by El País highlights significant operational, legal, and economic hurdles surrounding its execution. According to El País, the deal is unlikely to provide immediate relief for consumer fuel prices, as reviving Venezuela's severely deteriorated energy infrastructure after years of underinvestment will require substantial time and private capital. 

Venezuela Expands International Hydrocarbon Partnerships

Beyond liquid hydrocarbons, Venezuela is expanding its energy partnerships into non-associated offshore natural gas. On Aug. 14, 2026, MBN reported that the Venezuelan government transferred participation rights for Phase II of the non-associated gas license for the Loran field, located in Block 2 of the Deltana Platform along the maritime border with Trinidad and Tobago, to a consortium comprising BP Exploration Caribbean, UAE-based XRG PJSC, and Qatar-based UCC Oil and Gas Holding. 

The field holds over 4Tcf of proven gas resources. Under the agreement, BP, XRG, and UCC will each hold an equal working interest share, with BP serving as the operator for the development. Alongside the Loran Phase II license, BP signed a memorandum of understanding with the Venezuelan government covering the Carupano East Block in the Mariscal Sucre maritime area to evaluate additional offshore exploration opportunities.

This expansion follows a parallel legislative overhaul in Venezuela's energy sector. Enacted in late January 2026, the country's reformed Hydrocarbons Law allows private companies to undertake primary exploration and production activities, manage operational risk, and export crude directly to international markets. Under these commercialization provisions, foreign investors and joint ventures hold direct control over product sales, distribution, and commercialization channels rather than relying exclusively on state oil company PDVSA.