The United States and Venezuela have signed an agreement that would give a Washington-backed venture majority effective control of a significant part of Venezuela's vast oil reserves, President Donald Trump said on August 28, in what he hailed as the "biggest oil deal in world history".

Trump made the announcement on Truth Social, crediting Secretary of State Marco Rubio, Defence Secretary Pete Hegseth and Acting President Delcy Rodríguez with reaching the terms. It is the clearest marker yet of how far relations between the two governments have shifted since US forces seized former president Nicolás Maduro in January and whisked him to New York to face trial on drug trafficking charges.

According to AP, details of how the arrangement would work were set out by a US official familiar with the negotiations, who spoke on condition of anonymity because they were not authorised to discuss the matter publicly. Under the structure described, a newly formed private company — jointly held by Washington and an operator yet to be identified — would control the fields for a century, under a concession granted by Rodríguez's government. Washington's share would amount to 55% of the venture's output, split between an equity stake and preferential pricing on crude purchases; by reserves, the entity would rank behind only Saudi Aramco among corporate holders worldwide.

Caracas set out the scope of the deal in its own statement: 17 oilfields holding a combined 65bn barrels of proven potential, expected to draw more than $100bn in investment and yield the Venezuelan treasury above $209bn in tax receipts, according to Minister of Hydrocarbons Paola Henao. Writing on Telegram, Rodríguez predicted that the pact "will have a significant impact on our nation's revival", while the government's communiqué cast it as ushering in "a new era of recovery, growth, production, security and prosperity" for Venezuelans.

"These investments will contribute not only to the recovery of our industry, but also to economic growth, energy security in our hemisphere, and greater balance in international markets," Rodríguez stated.

Rubio described the pact as a "huge win for both the American and Venezuelan people" in a post on X, arguing that it would channel billions of dollars into private investment, create jobs and help rebuild Venezuela's economy, with the side effect of easing pump prices at home.

Political pressure over petrol prices

The politics of the deal are inseparable from the price at the pump, with Trump under mounting pressure ahead of November's midterm elections over the cost of petrol. Oil in the US averaged $4.09 a gallon on August 28, according to AAA, up from $3.21 twelve months earlier, as the six-month-old conflict between the US and Iran continues to squeeze supply through the Strait of Hormuz, a chokepoint that once carried roughly a fifth of global crude shipments. Washington has been drawing down the Strategic Petroleum Reserve to compensate; the stockpile slipped below 300m barrels in early August, a fall of more than 100m barrels since the start of the year.

Officials familiar with the arrangement said crude bought through the new venture would be used both to replenish the strategic reserve and for military purposes.

None of this points to an imminent fall in prices, however. Industry observers note that Venezuela's pipelines, refineries and export terminals have decayed over two decades and would need years of costly repair before output could rise substantially, while political risk continues to deter the biggest international players.

A reversal of decades of nationalisation

The agreement, Venezuelan authorities said, adds to 50 other deals signed with private investors in recent months. It also builds on a narrative Trump has pushed since Maduro's ouster: that Caracas effectively expropriated American oil interests when former president Hugo Chávez nationalised foreign holdings in 2007, and the new deal corrects that history. Rodríguez, for her part, moved quickly after being installed in Maduro's place to unwind that socialist legacy, signing legislation that threw the oil sector open to private capital and broke with more than two decades of state control championed by the Chavismo movement.

Separately, Chevron — the only big US oil company with a substantial existing presence in Venezuela, accounting for roughly a quarter of the country's output — is close to finalising its own expansion there, with a deal that could be unveiled as early as next week, the New York Times reported. It is unclear whether Chevron, which stayed in Venezuela through the Chávez and Maduro years after rivals such as ExxonMobil and ConocoPhillips withdrew, is the unnamed private operator hinted at in Trump's arrangement.

Adding to the sense of a broader realignment, Bloomberg has reported that Venezuelan officials are discussing a possible exit from OPEC with their US counterparts, though no decision has been made. Venezuela was a founding member of the cartel in 1960; people cited by Bloomberg said some in Washington view a Venezuelan departure as a way to loosen the group's grip on crude markets while clearing the way for Western companies to help revive the country's output.

The US Treasury's Office of Foreign Assets Control issued eight new general licences on August 27, easing restrictions on transactions in Venezuela's hydrocarbons, mining and telecommunications sectors, though the broader US sanctions regime remains in place.

The US Energy Information Administration puts Venezuela's proven crude reserves at 303bn barrels, around 17% of the world's known total and the largest of any single country. Yet Caracas pumped only about 1.16m barrels a day in July, Bloomberg reported, under half of what it produced a decade ago and a small fraction of global output, the legacy of years of underinvestment, mismanagement and crippling sanctions that have left much of its production infrastructure in disrepair.