A Closer Look At Trump’s Venezuela’s Deal

President Donald Trump’s administration is betting that a new oil agreement involving Venezuela could strengthen America’s energy position, challenge China’s influence in the Western Hemisphere and eventually provide some relief for U.S. consumers facing higher gasoline prices.

Interior Secretary Doug Burgum praised the agreement Monday, arguing that the United States is gaining access to potentially valuable oil assets while putting relatively little taxpayer money at risk.

According to Burgum, the arrangement gives the U.S. government a 35% ownership position in a private energy company with development rights in Venezuela, along with the ability to purchase 20% of its oil production at cost.

The administration believes the agreement could eventually help strengthen America’s emergency energy supplies and provide taxpayers with financial upside if the investment succeeds.

But the unconventional deal is also generating questions about Venezuelan crude oil, the company involved and the legal and political risks of doing business in the troubled South American nation.

Trump Administration Sees a Major Energy Opportunity

Trump announced the agreement Friday as his administration continues pushing an “energy dominance” strategy focused on increasing American access to oil and natural gas.

Under the arrangement, the Pentagon’s Office of Strategic Capital would reportedly receive a 35% passive stake in North American Blue Energy Partners.

The company holds development rights involving 17 Venezuelan oil fields.

In addition to the ownership stake, the United States would have the right to purchase one-fifth of the company’s production at cost.

Burgum portrayed the arrangement as an unusually favorable opportunity for the American government.

Rather than simply purchasing foreign oil at market prices, the administration’s approach could potentially allow taxpayers to benefit from the value of the underlying investment.

Burgum emphasized that the United States is investing in a private company rather than acquiring an ownership interest in the Venezuelan government.

He compared the idea to energy investments made by states including Alaska and North Dakota.

If the venture succeeds, Burgum argues, American taxpayers could participate in the financial upside.

Venezuela’s Oil Could Become a Strategic Weapon Against China

The deal isn’t only about gasoline prices.

It is also about China.

Venezuela possesses enormous petroleum resources, making the country’s energy industry strategically important despite years of political turmoil, economic problems and deteriorating infrastructure.

Burgum said oil that might previously have flowed toward China could instead become more closely connected to the United States.

“Now, they’re out. America is in,” Burgum said.

That represents the broader geopolitical argument behind the administration’s strategy.

Trump has repeatedly sought to reduce China’s influence over industries and resources considered important to American national security. Energy is near the top of that list.

Expanding American involvement in Venezuela could give Washington greater influence over a major source of petroleum located much closer to home.

Bringing Energy Production Closer to America

Burgum also believes the agreement could help shift the center of global energy influence toward the Western Hemisphere.

That could carry significant strategic advantages.

Oil traveling between Venezuela and refineries along America’s Gulf Coast doesn’t have to navigate some of the distant maritime chokepoints associated with energy shipments from other parts of the world.

For Americans who remember the energy crises of the 1970s, the strategic importance of reliable oil supplies is hardly theoretical.

Wars, embargoes and international instability have repeatedly demonstrated how quickly disruptions overseas can affect American motorists.

Developing more reliable energy supplies closer to the United States could therefore become an important part of America’s long-term energy security strategy.

Could Venezuelan Oil Help Refill the Strategic Petroleum Reserve?

Burgum says the agreement could eventually provide another benefit: helping replenish America’s Strategic Petroleum Reserve.

The SPR exists to protect the United States against severe disruptions to its oil supply.

Its inventory declined significantly after the Biden administration authorized major releases from the reserve, including the historic 2022 release following Russia’s invasion of Ukraine and surging fuel prices.

Trump has criticized those withdrawals and made rebuilding America’s emergency stockpile part of his broader energy agenda.

Burgum believes the Venezuela arrangement could create an opportunity to acquire crude at attractive prices.

There is, however, an important complication.

Some energy analysts have questioned whether Venezuelan crude could simply be placed directly into the Strategic Petroleum Reserve.

Much of Venezuela’s petroleum is heavy crude with relatively high sulfur levels. The SPR maintains specifications governing the crude stored in its facilities.

As a result, Venezuelan production may require additional processing, blending or another arrangement before it could play the role Burgum envisions.

That issue will be important to watch as the administration provides more details.

Gas Prices Put Pressure on American Families

The announcement arrives as millions of Americans are once again paying substantially more at the pump.

AAA put the national average for regular gasoline at approximately $4.08 per gallon Monday, compared with about $3.17 one year earlier.

For a household with multiple vehicles, that difference can quickly add up.

Higher fuel costs can also reach far beyond the gas station.

Truckers, farmers, manufacturers, airlines and delivery companies all depend heavily on energy. When transportation expenses increase, businesses frequently face pressure to pass at least some of those additional costs along to consumers.

That makes energy prices particularly important for retirees and Americans living on fixed incomes, who may have less flexibility in their monthly budgets.

Burgum said the administration wants gasoline prices moving back toward the levels Americans were paying a year ago.

The White House was also expected to meet with refiners Tuesday as officials consider ways to address fuel costs.

America Is Already an Energy Powerhouse

The Venezuela agreement comes at a time when the United States already occupies an exceptionally strong position in global energy markets.

America is the world’s largest producer of oil and natural gas and a leading exporter of liquefied natural gas.

Trump’s energy strategy has centered on using that strength to increase domestic economic activity while reducing America’s vulnerability to foreign governments.

Supporters argue that abundant energy can help lower costs, support manufacturing, create jobs and give Washington additional leverage against adversaries.

The administration now appears to be extending that philosophy beyond America’s borders by seeking greater influence over strategically important energy resources elsewhere in the Western Hemisphere.

Serious Questions Still Surround the Venezuela Deal

The administration’s optimism doesn’t mean the agreement is without risk.

Venezuela has a long history of political instability, government intervention in the energy industry and disputes involving foreign oil companies.

Exxon Mobil and ConocoPhillips reportedly declined administration requests to return to Venezuela, with concerns involving legal uncertainty, security and infrastructure.

Questions have also emerged concerning Alejandro Betancourt, the Venezuelan businessman leading North American Blue Energy Partners.

Betancourt has reportedly been the subject of investigations in multiple countries concerning alleged money laundering.

Those allegations should be treated carefully. Being investigated does not establish criminal wrongdoing, and allegations are not proof of guilt.

Venezuelan opposition figures have raised another concern, arguing that the agreement violates the country’s constitution.

Those legal and political disputes could complicate the venture and deserve scrutiny as additional details become available.

Will Trump’s Venezuela Gamble Pay Off?

For the Trump administration, the potential rewards are substantial.

A successful agreement could give the United States greater access to oil in its own hemisphere, reduce China’s influence in Venezuela, provide taxpayers with a potentially valuable investment and strengthen America’s overall energy security.

The biggest question for ordinary Americans is much simpler:

Will it actually help lower energy costs?

No single oil agreement controls gasoline prices. Crude prices, refinery capacity, seasonal demand, transportation costs, international conflicts and global markets all contribute to what motorists ultimately pay.

That means Americans shouldn’t expect one Venezuela agreement to produce an immediate collapse in prices at the pump.

The more important question is what happens over the longer term.

If the arrangement produces significant quantities of oil, generates returns for taxpayers and strengthens America’s access to affordable energy, Trump will be able to point to the agreement as evidence that his unconventional approach delivered results.

If Venezuela’s political instability, aging infrastructure or legal disputes prevent those benefits from materializing, critics will have plenty of ammunition.

Either way, the agreement represents a significant shift in American energy strategy.

Instead of watching Venezuelan resources move deeper into China’s orbit, the Trump administration is attempting to put the United States in a stronger position — and potentially give American taxpayers a piece of the upside.

For motorists paying more than they did a year ago, the ultimate test won’t be what politicians say about the deal.

It will be whether Americans eventually see the difference in their wallets.