Washington is weighing a potentially sweeping oil arrangement with Venezuela that could give US companies long-term access to some of the country’s enormous crude reserves.
The Trump administration is reportedly nearing an agreement that would allow American producers to develop a selection of Venezuelan oil fields, with part of the resulting crude supply potentially earmarked for the US market.
People familiar with the negotiations said the proposal is being discussed at senior levels of both governments.
One possible legal structure under consideration is a lease arrangement, followed by an auction or tender process through which individual fields would be awarded to US companies.
17 Oil Fields Under Discussion
A list reviewed by Reuters identifies 17 Venezuelan fields reportedly being considered.
The sites include undeveloped deposits in the country’s massive Orinoco Belt, as well as mature producing fields around Lake Maracaibo.
Some of the assets are already operated by a relatively small Chinese company under a contract signed during the administration of former President Nicolás Maduro.
The White House directed questions about the negotiations to the US Department of Energy.
Venezuela’s oil ministry, state oil company PDVSA and the US Energy Department did not immediately respond to requests for comment. Venezuelan Oil Minister Paula Henao was also unavailable for comment.
Venezuela Could Leave OPEC
The oil negotiations come alongside reports that Venezuela is considering another major policy shift: leaving OPEC.
Bloomberg reported on Thursday that Caracas is weighing an exit from the organisation as its relationship with Washington grows closer.
Venezuela was among OPEC’s founding members in 1960, but its oil industry has struggled for years with declining production, underinvestment and allegations of corruption.
The country has also repeatedly failed to meet its OPEC production targets.
A Venezuelan withdrawal would carry broader significance because Washington has long criticised OPEC’s influence over global crude prices.
Legal Obstacles Could Be Significant
Venezuela possesses the world’s largest proven crude oil reserves, but its existing legal framework could complicate the proposed arrangement.
Current regulations do not establish a straightforward system for leasing oil-producing acreage. Venezuela’s Constitution also reserves key activities in the petroleum industry for the state.
More recent reforms have opened the door to foreign participation through joint ventures and production-sharing agreements.
Even so, foreign oil companies have historically faced significant restrictions on formally booking Venezuelan reserves.
Legal and constitutional questions could therefore become a major hurdle if the proposed US arrangement moves forward.
Washington Seeks More Venezuelan Crude
The negotiations follow Washington’s removal of Nicolás Maduro from power in January and the Trump administration’s subsequent efforts to reshape Venezuela’s energy sector.
US officials are seeking a more reliable flow of Venezuelan crude to American refineries while encouraging investment in an industry that has suffered years of deterioration.
Venezuela currently produces approximately 1.25 million barrels of crude per day.
Axios first reported the negotiations and said US Energy Secretary Chris Wright could travel to Caracas as early as next week.
Could the Deal Affect US Gasoline Prices?
The potential oil arrangement also carries domestic political implications.
The Trump administration is facing pressure over higher gasoline prices ahead of this year’s midterm elections.
Additional Venezuelan crude could therefore serve two purposes: expanding supplies for US refiners while supporting the administration’s broader push for increased oil production.
More Venezuelan production could also increase the amount of crude available to the global market, although the eventual effect on pump prices would depend on factors including refinery capacity, sanctions, transportation and broader global oil demand.
Strategic Petroleum Reserve Also in Focus
Washington is simultaneously exploring ways to rebuild the Strategic Petroleum Reserve (SPR).
The administration has considered mechanisms including crude-oil swaps involving US producers.
The reserve currently contains roughly 290 million barrels, equivalent to about 41% of its total storage capacity.
Efforts to replenish it have been complicated by funding constraints and maintenance work.
The US drew heavily on the reserve following Russia’s invasion of Ukraine in 2022 and again after the Iran war began in February.
A Potentially Transformative Oil Deal
If completed, the proposed arrangement would represent a significant shift in Venezuela’s oil relationship with the United States.
For Washington, it could provide greater access to a huge source of crude while opening opportunities for American energy companies.
For Caracas, closer cooperation with US producers could bring badly needed investment and technical expertise to a struggling petroleum industry.
But the legal framework, ownership structure, sanctions environment and political durability of any agreement remain unresolved.
The size of Venezuela’s reserves makes the opportunity enormous. Turning that potential into actual production, however, could prove far more complicated.