Trump announces US takeover of Venezuelan oil
The United States has secured control of a significant portion of Venezuela's oil reserves through what President Donald Trump described on Friday, August 28, as "the biggest oil deal in world history." The agreement grants the US majority control of more than 65 billion barrels of proven oil reserves in Venezuela, representing approximately 21% of the country's total reserves of 303 billion barrels—the world's largest.
Venezuela's interim president Delcy Rodriguez confirmed the "historic agreement" one hour after Trump's announcement on Truth Social. According to a government statement, the deal encompasses the development of 17 strategic oil fields with an expected investment exceeding $100 billion, projected to generate more than $209 billion in tax revenues for the Venezuelan state.
Trump emphasized that US Secretary of State Marco Rubio and Defense Secretary Pete Hegseth negotiated the deal, which he said would "more than double American oil reserves" and "substantially lower gas prices for all Americans" without cost to taxpayers. The president stated the transaction would help "set Venezuela on a course toward tremendous success and great prosperity."
Reviving a collapsed industry
The agreement addresses Venezuela's dramatic oil production decline, which has fallen from over 3 million barrels per day in the late 1990s to approximately 1 million barrels daily in 2026—a collapse of more than 70% from 2013 levels. This deterioration occurred despite Venezuela holding roughly 17% of global oil reserves, surpassing even Saudi Arabia.
Most of Venezuela's oil wealth is concentrated in the Orinoco Belt, where deposits consist predominantly of heavy crude that requires specialized infrastructure and is more expensive to produce than conventional oil. Under former presidents Hugo Chavez and Nicolas Maduro, the state-owned oil company PDVSA faced a 40-45% levy to fund social programs, reducing profit reinvestment and contributing to declining production capacity.
The massive investment required by the deal reflects both the technical challenges of developing Venezuela's heavy crude reserves and the need to rebuild infrastructure that deteriorated over decades of underinvestment.
Political context and sanctions relief
The oil agreement follows significant political changes in Venezuela. Rodriguez, who previously served as vice president from 2018, was sworn in as interim president on January 5, 2026. In late January 2026, Venezuela's interim government passed oil sector reforms aimed at opening the industry to private investors, reversing decades of state control that were tightened under Chavez in the mid-2000s.
These reforms marked a dramatic shift from the comprehensive US economic sanctions maintained since 2019, which targeted PDVSA and blocked most transactions with the Venezuelan government. US crude oil imports from Venezuela had stopped shortly after sanctions were imposed in January 2019.
Secretary of State Rubio has played a central role in shaping US Venezuela policy, including testifying before the Senate Foreign Relations Committee on January 28, 2026, about the administration's strategy for the country. Venezuela was a founding member of OPEC in 1960 alongside Iran, Iraq, Kuwait and Saudi Arabia, though its influence within the organization has diminished as production collapsed.
PDVSA, created in the 1970s when Venezuela nationalized its oil industry, has historically been the largest revenue source for the Venezuelan government, making control over oil production central to the country's economic future.
