The Trump administration is casting its new Venezuela oil agreement as a long-term effort to secure U.S. energy supplies against disruptions from the Iran war in the Strait of Hormuz, though analysts warn Venezuelan production will take years to affect global prices.
“This is first and foremost about geopolitics,” a senior U.S. official said Tuesday on a White House press call about the deal, adding that Washington saw it as a way to secure “a reliable and stable supply of energy for the future.”
“There are challenges throughout the world, irrespective of and even predating the conflict with Iran in the Middle East,” the administration official said, “and there is clearly a defined U.S. interest in ensuring that one of the largest energy suppliers in our hemisphere is aligned with us and not with an adversary.”
Under the deal announced Friday by President Donald Trump, the U.S. government will receive a 35% equity stake in the corporate parent of North American Blue Energy Partners, which has been granted concessions to operate 17 Venezuelan oilfields containing some 65 billion barrels of proven reserves.
The State Department will also have the right to buy 20% of all current and future production from those fields at production cost, with the White House saying the oil could be used to replenish the U.S. Strategic Petroleum Reserve. The United States will also have first refusal on the remaining 80% during “emergencies,” according to the agreement.
The arrangement is also aimed at reducing Chinese and Russian influence over Venezuela’s energy sector, the U.S. official said, describing the deal as “a geopolitical opportunity” to bring fields that had largely been under the influence of Chinese and Russian companies into alignment with Washington instead.
The six-month war with Iran, meanwhile, has demonstrated Tehran’s ability to disrupt the global economy by limiting access to the Strait of Hormuz.
The U.S. Energy Information Administration estimates that crude oil and other petroleum liquids moving through Hormuz averaged just 4.9 million barrels per day in the second quarter of this year, down from 21.6 million barrels per day in the final quarter of 2025, before the U.S.-Israeli strikes on Iran in February.
The conflict has also placed growing pressure on the Strategic Petroleum Reserve. The latest EIA figures show the reserve contained about 289.7 million barrels on Aug. 21, its lowest level in decades. Trump said over the weekend that the oil obtained under the Venezuela deal would help replenish the reserve.
Venezuela’s vast oil stocks, however, may be years away from reaching the market.
The country currently produces only about 1.1 million barrels a day, far less than even its neighbor, Brazil, despite holding the world’s largest proven reserves. Years of underinvestment and deteriorating infrastructure mean that any expanded production could require tens of billions of dollars of investment and years of work, according to energy experts.
In an analysis released Monday, Swiss investment bank UBS called the deal “strategically significant” but noted that “Hormuz disruption remains the dominant driver” of global oil prices, while “Venezuelan production gains will take years.”
“So, while the U.S.-Venezuela announcement reinforces the longer-term potential of the country’s energy sector, we anticipate little immediate impact on crude oil or U.S. gasoline prices,” it said, calling the U.S.-Iran conflict a larger factor.
Tracy Shuchart, a senior economist at NinjaTrader, made a similar point in a post on X. “The easy [Venezuelan] barrels are already back,” Shuchart wrote, arguing that the full reserves will take a long time to convert into actual oil production.
“It is a 100 year deal because it takes decades,” she wrote. “The barrels that could actually move a U.S. pump price are 5 to 15 years out.”
The administration official acknowledged that developing the reserves would take time, but argued their scale still made the deal valuable to the United States.
“Obviously, this will require sustained engagement,” the official said. “Sixty-five billion barrels of proven reserves is not a small number.”
