Donald Trump Highlights Venezuela Oil Deal During UNGA Address, Promises Global Energy Price Reduction
US President Donald Trump announced on Tuesday that a new oil deal between the United States and Venezuela is set to significantly reduce global energy costs. He described the agreement as the “largest oil deal in history,” covering an estimated 65 billion barrels of oil. Speaking at the United Nations General Assembly, Trump emphasized that the deal would benefit both nations and attract major global oil companies to Venezuela.
Trump stated that the agreement would “benefit both Venezuela and the United States enormously” and help lower energy prices worldwide. He claimed that together, the two countries control more than 60% of the world’s oil supply. The deal focuses on revitalizing Venezuela’s oil industry, which has suffered from years of mismanagement and sanctions. Venezuela’s interim President Delcy Rodriguez indicated that the agreement aims to boost the country’s oil production to 1.5 million barrels per day.
The deal encompasses 17 oil fields with proven reserves of 65 billion barrels. It is projected to attract $100 billion in investments into Venezuela’s oil sector and generate over $209 billion in taxes for the Venezuelan government. A new company has been established by the US government and a private operator in Venezuela, granting rights to untapped oil fields for a century. The US is expected to receive 55% of the new company’s output through an ownership stake and the right to purchase oil at cost, which will be directed towards strategic reserves and military use.
Despite the optimistic projections, Venezuela’s oil infrastructure is in dire condition and will require substantial investment and time to repair. Experts caution that while the deal could be beneficial in the long run, an immediate increase in Venezuelan oil production is unlikely. Amy Myers Jaffe from New York University noted that the agreement would not quickly impact retail gasoline prices, while Kevin Book of ClearView Energy Partners emphasized that significant production increases would take years due to the necessary investments.
In his address, Trump also referenced the US military operation in January that targeted former President Nicolás Maduro, stating that it led to the release of numerous political prisoners in Venezuela. He asserted that US actions demonstrate a commitment to preventing threats to America in the Western Hemisphere. However, the oil agreement has faced criticism from some Venezuelan experts, including Harvard professor Ricardo Hausmann, who labeled it a “shameful deal” and questioned its legitimacy.
Additionally, Trump expressed optimism about reaching a deal with Iran following the upcoming midterm elections. He suggested that negotiations could commence soon after November 3, stating, “I believe we’ll make a deal right after the election because it doesn’t make sense for them not to.” He also hinted at the possibility of military action if negotiations do not proceed as expected.
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