US-Venezuela oil deal goes far beyond crude

Washington’s acquisition of more than one-fifth of Venezuela’s oil reserves under a deal formally signed with US Energy Secretary Chris Wright on September 2 was as surprising as it was dramatic. US President Donald Trump’s comment days earlier that it was the “biggest oil deal in the history of the world” appears justified from several angles.

In terms of reserves alone, the agreement covers 65 billion barrels of proven crude oil reserves across 17 fields, out of Venezuela’s total reserves of 303 billion barrels. To put the scale into perspective, that is roughly 1.5 times the United States’ entire current domestic oil reserves of around 46 billion barrels.

The duration of the concession is also extraordinary at 100 years, far exceeding the typical 20- to 30-year terms of modern oil concessions.

On top of that, North American Blue Energy Partners (NABEP), the private entity leading the deal, has overnight become the world’s second-largest private oil company by reserves after ExxonMobil, while the US Department of War holds a 35% stake in the company.

In other words, securing control over a share equivalent to roughly one-fifth of the world’s largest national oil reserves for an entire century is unprecedented in the modern era. Yet major questions remain over the deal’s feasibility and how it fits into the global oil-market order Trump is seeking to shape.

The 2025 US National Security Strategy formally put the second Trump administration’s vision for the world and energy markets on paper. The strategy explicitly introduced what it called the “Trump Corollary to the Monroe Doctrine,” stating: “After years of neglect, the United States will reassert and enforce the Monroe Doctrine to restore American preeminence in the Western Hemisphere, and to protect our homeland and our access to key geographies throughout the region.”

“We will deny non-Hemispheric competitors the ability to position forces or other threatening capabilities, or to own or control strategically vital assets, in our Hemisphere. This ‘Trump Corollary’ to the Monroe Doctrine is a common-sense and potent restoration of American power and priorities, consistent with American security interests,” it added.

The original Monroe Doctrine, introduced by US President James Monroe in 1823, was intended to keep European colonial powers out of the Americas.

This new version, dubbed the “Donroe Doctrine,” represents a major departure from the model of global US hegemony that prevailed in the post-Cold War era, toward a highly transactional, realpolitik vision of a world effectively divided into three distinct spheres of influence.

China is expected to play the dominant role in Asia, while Russia would dominate Europe or exercise substantial influence there, depending on how any future conflict between European NATO members and Moscow develops.

The United States, however, would remain at the top of this arrangement, retaining overall global supremacy while also exercising direct influence across North and South America.

Naturally, since energy forms the foundation on which the economies of every country, and therefore their politics, are built, shifting the center of global energy-supply dominance toward the Americas is a central part of this objective. At the same time, the United States retains the option of extending its influence in the Middle East or anywhere else it considers appropriate.

In practical terms for global oil flows, the United States aims to orchestrate a major increase in oil production not only domestically but also in key countries within its sphere of influence in the Americas. Venezuela is at the forefront in the short to medium term, alongside Argentina and Brazil, as Washington seeks to offset future losses from the Middle East.

Deal aligns with Trump’s vision for energy and influence

The broad terms of this enormous US-Venezuela agreement align almost entirely with Trump’s vision, something reflected in a White House fact sheet issued on August 31, which reiterated many of the same central themes.

Under the subheading “Reasserting the Monroe Doctrine and expelling foreign adversaries from the Western Hemisphere,” the fact sheet said: “The majority of the additional oil fields to be operated by NABEP were previously controlled or operated by Russian and Chinese companies, or corrupt cronies of President Nicolás Maduro and President Hugo Chávez.”

“These malign foreign actors plundered Venezuela’s resources to benefit American adversaries like Cuba, Russia, and China, and failed to invest in or develop Venezuela’s infrastructure,” it added.

The fact sheet said the new agreement with Venezuela specifically formed part of the reassertion of the Monroe Doctrine and focused on “cleansing malign influence from our backyards and ensuring American dominance in the Western Hemisphere is never questioned again.”

Perhaps with future energy-security threats arising from Chinese military actions in mind, similar to those that emerged following Russia’s invasion of Ukraine on February 24, 2022, the fact sheet concluded: “By working with new and old partners alike, the Trump Administration is shaping new, strong, strategic, and defensible supply chains in the Western Hemisphere to support the revival of our manufacturing and energy sectors after years of global decline.”

However, there are several potential legal obstacles that could create problems for the United States, particularly if a less cooperative political leadership begins to emerge in Venezuela.

Under the current arrangement, the United States exercises tight control over virtually every element of the structure. This includes, for example, holding veto power over NABEP’s board, while the law requires US citizens to occupy a majority of board seats.

At the same time, the Pentagon’s Office of Strategic Capital retains a 35% stake in NABEP.

Furthermore, the United States is guaranteed the right to purchase 20% of the crude oil produced at cost, while holding a right of first refusal on the remaining 80%.

Funds allocated to Venezuela’s state energy apparatus will also be routed through a US-administered and audited account designed to prevent domestic corruption.

In practice, none of this falls outside the precedents established by China and Russia through numerous “cooperation agreements” with various countries over the years, particularly Iran and Iraq, although some have portrayed the agreement in colonial terms.

Perhaps the biggest legal problem at present is that Venezuela’s constitution requires National Assembly approval for any long-term concessions involving strategic national resources.

Complicating matters further, the agreement was negotiated by a transitional government whose constitutional legitimacy is already being challenged.

Any future government could therefore argue that the transitional administration lacked the necessary authority and that the entire agreement should consequently be declared ultra vires and void.

Such a move could even occur without a change in government, as Venezuela’s Supreme Tribunal of Justice (TSJ) has the constitutional mechanisms necessary to challenge, suspend or completely invalidate NABEP’s concession.

Such a challenge could be based solely on the transfer of control over Venezuelan oil reserves to a foreign power, something that is also strictly prohibited by the Venezuelan constitution.

Venezuela expects massive investment and revenues

Nevertheless, Venezuela’s current transitional government, led by President Delcy Rodríguez, appears fully supportive of the agreement, saying the United States is targeting production of more than 1.5 million barrels per day from the 17 strategic fields over a 25-year period.

According to her government’s projections, this would generate more than $100 billion in investment and $209 billion in tax revenues for the Venezuelan state.

Venezuela’s oil production has risen to around 1.21 million barrels per day, supported by several new initiatives from US and European companies.

Following the announcement of the massive US-Venezuela oil agreement, Italy’s Eni signed a strategic contract with Venezuelan state oil company PDVSA to take over operations at the onshore Junín 5 oil field in the Orinoco heavy-oil belt.

Under the terms of the agreement, Eni will assume full responsibility for the site’s technical, financial and commercial management, while the field is believed to contain around 35 billion barrels of oil in place.

Meanwhile, Chevron said it had agreed on updated terms for its joint ventures in Venezuela and plans to invest more than $7 billion over the next five years, targeting production of around 600,000 barrels per day.