Trump announces US secures majority control of Venezuela's 65 billion barrels of oil reserves

President Donald Trump has promised that his massive oil deal with Venezuela will "substantially lower gas prices for all Americans, long into the future." However, energy experts warn that U.S. drivers will not see immediate relief at the pump, as it will take years to significantly boost the South American nation's oil production.

The Deal at a Glance

Trump announced Friday that the U.S. has secured majority control over 65 billion barrels of Venezuela's proven oil reserves — approximately 20% of the 303 billion barrels the country is believed to possess.

But the terms of the agreement with Caracas have not been disclosed by the Trump administration, leaving its legality and long-term viability uncertain, experts say.

"Nothing has been published, so we're really still operating on Tweets and rumors," said David Goldwyn, who served as a State Department special envoy for international energy affairs under President Barack Obama.

Current Gas Prices in the U.S.

Trump's promise of lower prices comes as American drivers face rising costs at the pump:

• National average: $4.08 per gallon on Monday
• Year-over-year increase: Nearly 30% higher than the same time last year (AAA data)

Prices are rising due to Ukraine's attacks on Russian refineries and supply disruptions in the Middle East triggered by the Iran war.

Patrick De Haan, head of petroleum analysis at GasBuddy, said it is "basically a foregone conclusion" that gas prices will set a new all-time high for Labor Day. The previous record was $3.83 per gallon in 2012.

"Unless we get some sort of magical 20 cent drop, which is next to impossible, it'll be a record setting Labor Day in terms of the national average," De Haan said. "Gas prices have never been this high this late into the year unfortunately."

Venezuela's Production Challenges

Venezuelan oil exports will not provide near-term relief to U.S. drivers. The country's oil infrastructure is in a state of disrepair after years of mismanagement by its socialist government.

• Current production: Approximately 1.2 million barrels per day (bpd)
• Peak production: 3.5 million bpd in the late 1990s

Rystad Energy estimated in January that it would require about $180 billion of investment through 2040 to return Venezuela to its peak production.

Secretary of State Marco Rubio said Friday that Trump's deal will bring nearly $100 billion of private sector investment to the country.

"This will have absolutely no impact on gasoline prices or Venezuelan production for that matter for years to come," Goldwyn said of the deal.

Uncertainty Around Investment and Infrastructure

It remains unclear which oil companies will invest in Venezuela to extract its reserves and how those deals will be structured, said Andy Lipow, president of Lipow Oil Associates.

Chevron is the only major U.S. oil company currently active in the country, operating through joint ventures with state-owned PDVSA. According to chief financial officer Eimear Bonner, Chevron's production in Venezuela has increased 15% to 280,000 bpd this year, with expectations to grow output up to 50% through 2028 — reaching around 400,000 bpd in approximately two years.

However, production growth will be constrained by limits at Venezuela's export terminals, Lipow noted. Tankers are currently waiting up to 30 days to load crude oil cargoes due to challenges with ageing infrastructure and power outages affecting ports.

The terminals "would have to be expanded in order to handle more production," Goldwyn said. "It's unclear who's taking on that project."