Claims And Facts About Venezuela Oil Deal

Venezuela’s interim President Delcy Rodriguez (R) and US Energy Secretary Chris Wright (L) shake hands as they give a press conference after the signing of an oil agreement at the Miraflores Presidential Palace in Caracas on September 2, 2026. US Energy Secretary Chris Wright oversaw the signing of deals worth “tens of billions of dollars” between Venezuela and oil majors Chevron and ENI as well as with energy company GE Vernova on September 2, 2026. (Photo by Juan BARRETO / AFP via Getty Images)

There is an irony at the heart of Washington’s new oil deal with Venezuela.

Just as the United States is positioning itself to gain influence over billions of barrels of future Venezuelan production, America’s own emergency stockpile has fallen to its lowest level in more than 45 years—when it was still being filled for the first time.

The Trump administration’s deal with Caracas may or may not prove to be an important piece of U.S. energy policy in the longer run. But it is definitely not a substitute for refilling and repairing the Strategic Petroleum Reserve (SPR). Oil that might be produced years from now in Venezuela cannot solve a supply crisis tomorrow if the American reserve is short of usable crude or lacks the infrastructure to move it.

The Promise of Venezuela – What Does this New Agreement Offer?

The White House deal covers 17 Venezuelan oil fields with roughly 65 billion barrels of proven reserves. North American Blue Energy Partners (NABEP), the firm chosen to develop this oil, has been offered a deal that might remind analysts of an earlier time in the history of the industry.

NABEP will receive 100-year concessions from the Venezuelan government, while the U.S. Department of War’s Office of Strategic Capital, takes a 35% stake in NABEP. The State Department, meanwhile, will have the right to buy 20% of current and future production at production cost, plus a right of first refusal on the rest.

NABEP says it will seek $100 billion to invest in repairing and upgrading the relevant infrastructure, much of which is in a degraded state. This will also have to include reconditioning a sizeable number of existing wells and possibly drilling new ones as well.

This work will be more extensive, specialized, and expensive than most field upgrades because of the extra-heavy, flow-resistant nature of the oil itself. I offered some details about this in an earlier article, where I emphasized a minimum of 3-5 years would be needed to elevate production to a significant degree beyond the 1.2 million barrels/day Venezuela now produces.

Chevron, which has grown output from its concessions by 12% this year, plans to double this by the end of 2028 to about 420,000 bbls/d and then increase this to around 600,000 bbls/d by the early 2030s. These plans include $7 billion of investment in different areas than the mentioned 17 fields. Important as this is—Chevron being a company with deep pockets and superior expertise—it will be only part of what’s needed to boost Venezuela to the 3.4 million bbls/d it achieved in 1998. That could well require a decade or more.

Map of oil blocks in Venezuela (exploited or not), showing those (in red) where the US oil major Chevron was operating at late 2025. (Graphic by AFP via Getty Images)

Such appears a likely target in the minds of officials in both Washington and Caracas and sounds impressive as a projection. Yet, it depends on investment actually arriving, production progressively growing, oil prices happily cooperating, and the political framework surviving—in short, what happens above-ground.

For Washington, there is a definite national security aspect. Many of the 17 fields were licensed to Chinese and Russian companies under Maduro. Meantime, even as the world’s largest hydrocarbon producer, the U.S. is the second largest oil importer, after China. More oil from Venezuela could reduce dependence on the Persian Gulf, and perhaps—given current White House priorities—America’s biggest supplier, Canada, as well.

Facts to Consider in this “Biggest Oil Deal in World History”

Trump and officials have made a number of claims about what this deal represents that might benefit from some factual adjustment.

First, it is not the largest such deal in history. One example: in 1901, British financier William Knox D’Arcy obtained a 60-year concession from the Shah for the oil of Iran (est. proven reserves 209 billion bbls). Six years later the deal shifted to newly formed Anglo-Persian Oil Company, which later became BP (the deal did not long survive, however).

Second, the deal will not bring down oil (read: gasoline & diesel) prices anytime soon. If the president hoped his announcement would itself convince the market that more was on the way soon, it failed to do so. Such a possibility, moreover, was wholly offset by renewed hostilities between the U.S. and Iran in the Persian Gulf and Strait of Hormuz.

Third, the 65 billion bbls would not “double U.S. reserves.” This is not how things work—the oil is still in Venezuela, no matter who develops it. Also, estimates for “proven” U.S. reserves vary from 46 to 69 billion bbls. As this might suggest, there’s no real consensus. The technological revolution, in which “fracking” is only a part, has enormously expanded the total likely endowment, which continues to be debated. In my own conversations with industry scientists, numbers as high as 100+ billion bbls are mentioned.

Venezuela’s interim president, Delcy Rodriguez and US Interior Secretary Doug Burgum, at the Miraflores Presidential Palace in Caracas on March 4, 2026. (Photo by Federico PARRA / AFP via Getty Images)

Fourth, Interior Secretary Doug Burgum has said the deal “shifts the [center] of geopolitics of energy from the Middle East to the Western Hemisphere.” The key problem here is that energy geopolitics today has multiple centers—those for oil, natural gas, coal, nuclear, solar, and wind. Europe, for example, depends on the U.S. for as much as 58% of its gas imports but 98% of its solar panels.

Finally, Trump has said that “One of the things I am going to do with the Venezuelan Oil is fill up the Strategic [Petroleum] Reserves.” This deserves a bit of discussion.

Could Venezuelan Oil Help Refill the SPR?

Trump’s promise is appropriate in one sense: the SPR needs help, and soon.

As of late August 2026, it held just under 290 million bbls, its lowest level since late 1982, about 40% of the official 714 million bbl capacity. This will drop to about 240 million (34%) if Trump gives the go-ahead for a final release agreed to with the International Energy Agency to help soften market effects of the Iran War.

By late August 2026, the amount of crude oil in the SPR fell to 286.6 million barrels, its lowest level since 1982. (Photo by Omar Zaghloul/Anadolu via Getty Images)

In its total history, the SPR has seen a total of about 500 million bbls withdrawn, with more than two-thirds used to offset sudden high price events, one in 2022 (180 million bbls, related to Russia’s invasion of Ukraine), the other in 2026 (172 million bbls). These drawdowns, coming so close to one another, demonstrated that the SPR could still perform under enormous pressure.

But it also highlighted an aging system greatly in need of repair. According to a recent, sobering General Accountability Office (GAO) report, triage fixes to SPR infrastructure had to be made during these recent releases due to years of inadequate maintenance. As the report states, the 2022 withdrawal “served as an unplanned stress test of the reserve’s operational capabilities” that showed it operated “well below what the SPR was designed to be capable of in terms of speed and scale.”

Pumps, pipes, electrical equipment, water systems, storage tanks, fire protection, commercial pipelines and terminals all have to work. If one link fails, the barrels sitting underground may not be much use. There are also problems related to the wells used for injecting and withdrawing oil from the salt caverns where it’s stored, together with underlying brine (oil being less dense than water).

Congress has added to the wear and tear by directing sales of crude from the SPR for its own budgetary priorities.

The GAO’s assessment is that the reserve has continued to meet demanding releases, but its ability to do so is ever-more at risk. For now, there appears to be no clear plan for how to address the full range of challenges to bring the reserve fully up to grade—even aside from the issue of refilling it.

Not A Good Match For What The SPR Needs

The idea of refilling the SPR with petroleum from Venezuela’s massive Orinoco Heavy Oil Belt isn’t likely to be realized any time soon, if ever. The reason isn’t political or economic but scientific.

Orinoco crude in its raw state is too dense and too rich in sulfur to be injected into the SPR. Such crude is highly viscous, resistant to flow, and corrosive. To be useful, it would require being diluted with a very light hydrocarbon liquid (naptha or condensate) and subjected to sulfur removal. To get the original crude to an acceptable density level would require dilution to as much as 50%, with desulfurization normally performed in a catalytic chemical reaction at high temperatures and pressures. All of which adds significant cost.

Heavy oil like that from the Orinoco Oil Belt in Venezuela is thick and viscous and needs to be diluted with much lighter petroleum liquids to be transported through pipelines and loaded on tankers. (Photo by Ed Lallo/GETTY IMAGES)

There’s a maintenance issue here too. To respond to an emergency, the SPR was designed to withdraw oil rapidly–4.4 million bbls/d was the original maximum. In practice, releases have never come near this, with the recent, large-scale withdrawals kept to 1.0 – 1.4 million bbls/d over a period of 4-6 months. GAO suggests that this lower rate partly reflects a goal to reduce added wear on infrastructure and on the salt caverns themselves.

DOE should also document the lessons from the 2022 drawdown and the life-extension project, update technical standards that may no longer reflect current conditions, and give Congress a realistic estimate of what it costs to keep the reserve operational.

Energy security is more than a barrel count

Washington’s new Venezuela deal, if it survives, could reduce other imports and thus make America more energy secure as far as oil is concerned. Over the next decade, it could supply significant new production to Gulf Coast refineries configured to accept such crude.

But it won’t lower gas and diesel prices anytime soon, and it won’t do much for refilling the SPR, itself a confirmed element in U.S. energy security. The 2026 emergency release showed that the reserve can be indispensable in an emergency, preventing fuel prices from stratospheric heights and all the effects that would follow from this.

What the deal does do, however, is to help put the spotlight on this reserve and its needful condition. As things stand, the United States has been asking an aging infrastructural system to do more, even as it is kept in a condition of weakening capability.

This article was originally published on Forbes.com