Donald Trump may have secured access to one of the largest pools of oil on earth. He has not secured the politics around it. The agreement with Venezuela’s interim president, Delcy Rodríguez, would grant a US-backed venture control over about 65 billion barrels of proven reserves across 17 fields, with concessions lasting 100 years. Washington would reportedly control 55% of effective production and obtain oil at cost, potentially creating the second-largest private holder of proven reserves after Saudi Aramco. On paper, it is an extraordinary strategic victory. In practice, it may be considerably more fragile. The problem is legitimacy.
The agreement was negotiated without Venezuela’s opposition. María Corina Machado was excluded. Rodríguez herself lacks an undisputed electoral mandate. Both the opposition and hard-line supporters of chavismo are now attacking the deal, although for completely different reasons. For the opposition, Washington risks exchanging democratic transition for oil. For chavistas, Rodríguez risks exchanging national sovereignty for political survival. That combination is dangerous. An agreement rejected by both sides of a country’s political divide may be legally signed yet remain politically unstable. And oil investment hates political instability. Developing Venezuela’s reserves will require tens of billions of dollars. The country currently produces only around 1.16 million barrels a day, less than half its output a decade ago. Fields have deteriorated. Infrastructure requires rehabilitation. Venezuela’s ultra-heavy crude requires expensive upgrading capacity. Pipelines, power systems and export terminals need investment.
The reserves exist. The productive capacity does not. This distinction is essential. Trump can announce control over 65 billion barrels. He cannot produce them with a presidential statement. Chevron, ExxonMobil, ConocoPhillips and other companies must decide whether they are prepared to commit capital for decades under contracts that a future Venezuelan government could reject and a future US administration could abandon. That is where the political architecture becomes an economic problem. A 100-year concession sounds reassuring. It is meaningless if investors are uncertain about year five. Venezuela has been here before. Foreign companies once dominated the country’s petroleum industry. The state subsequently nationalised the sector. ExxonMobil and ConocoPhillips lost assets during the Chávez era. The political backlash against foreign control of natural resources became one of the foundations of chavismo itself. History does not necessarily repeat. But investors price the possibility that it might.
The current agreement may actually increase that risk. Trump’s strategy appears designed to bind Washington economically to Rodríguez. Once American companies invest billions, the US develops an interest in preserving the political stability protecting those investments. That could gradually change Washington’s incentives. Originally, the objective was transition with stability. The risk is that it becomes stability instead of transition. For Rodríguez, that may be precisely the attraction. The more strategically important she becomes to American energy policy, the less urgent elections may appear in Washington. This helps explain the opposition’s anger. Oil can stabilise governments. It can also stabilise the wrong government. There is another contradiction.
The United States wants private companies to invest massively in Venezuela while simultaneously increasing the political nature of those investments. The proposed venture is not simply a commercial project. It is part energy security, part foreign policy, part strategic competition with China and part domestic politics ahead of US elections. Oil produced at cost could help replenish the Strategic Petroleum Reserve, supply the US military and reduce dependence on Middle Eastern flows disrupted by the Iran war. Strategically, the logic is obvious. Commercially, it is less comfortable. The more Washington treats Venezuelan oil as an instrument of state power, the more future Venezuelan governments may treat American investment as an instrument of foreign control. That is exactly how resource nationalism is created.
The lack of transparency makes the problem worse. Rodríguez claims that Venezuela could earn around $19 per barrel produced and generate $209 billion in fiscal revenues. Independent calculations suggest the disclosed revenue assumptions may imply considerably less government income once spread across the 65 billion barrels and discounted over decades. Investors still do not know enough about taxation, ownership, governance or legal protection. Those details matter more than the headline reserve number. Trump’s agreement could eventually transform Venezuela’s economy and restore one of the world’s great oil industries. But there is another possibility. The US may secure extraordinary contractual rights today only to create the political conditions for their rejection tomorrow. Control over reserves is not the same as control over production. nd control over production is not the same as control over history. America may have found the oil. The harder task will be ensuring that Venezuela still accepts the deal once the oil finally starts flowing.