US-Venezuela Oil Deal: Trump Secures 65 Billion Barrels, But Experts Warn of Delayed Impact on Gas Prices

WASHINGTON — President Donald Trump announced a historic US-Venezuela oil deal this week that grants the United States majority control over more than 65 billion barrels of proven crude oil reserves. While the administration touts the agreement as a massive win for American energy security, energy experts caution that the unprecedented move is unlikely to deliver immediate relief for consumers facing high gas prices.

According to a recent social media statement, the agreement was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Venezuela’s acting President Delcy Rodríguez. The administration describes the arrangement as a historic transaction that more than doubles American oil reserves and greatly increases the national oil supply at no cost to the taxpayer.

However, Tom Kloza, Chief Energy Advisor for Gulf Oil, emphasizes that the timeline for this influx is measured in years, not months. Kloza compares the acquisition to a baseball team adding to its farm system, noting that while the scope is stunning, it will not address the challenges American motorists face this year or next. Any tangible impact on domestic fuel prices is likely three to six years away.

The crude oil in question, located primarily in Venezuela’s Orinoco Basin, is much heavier and more viscous than typical Middle Eastern oil. While West Texas and New Mexico oil can be brought to market in six to seven months, Venezuelan heavy crude requires six to seven years of development. It must be brought to the surface, upgraded, and mixed with a diluent to lighten it before it can be transported globally. Fortunately, the United States possesses more sophisticated, complex refineries capable of processing this heavy crude than any other country in the world.

This new supply dynamic could significantly alter North American trade flows. Kloza points out that the primary alternative for US refiners is currently Canadian heavy crude. If Venezuelan oil imports increase by roughly one million barrels a day, Canada would be the “biggest loser,” as it lacks the infrastructure to easily redirect its stranded crude to tidal waters for alternative global markets.

Despite the monumental scale of the 65-billion-barrel figure, global markets have not reacted to the news. In fact, oil prices have recently ticked up by about a dollar a barrel due to ongoing attacks in the Persian Gulf. Kloza clarifies that the current market challenge is not a crude oil shortage, but a refining crisis for finished products like diesel and gasoline. Approximately seven million barrels a day of global refining capacity remain offline, largely due to drone attacks targeting infrastructure in Russia and the Middle East.

Regarding the US Strategic Petroleum Reserve (SPR), some have expressed concern that heavy, viscous Venezuelan oil could damage underground storage caverns. Kloza dismisses this, explaining that the Venezuelan crude could simply displace other heavy sour crudes, allowing those displaced barrels to be stored in the SPR instead. This is a critical consideration, as global strategic sales are projected to run out within the next 30 days, potentially tightening worldwide crude markets. Currently, Venezuelan production remains stalled at about 1.15 to 1.2 million barrels a day, meaning additional volume will take years to materialize.

Domestically, the prospect of a future global supply increase—from 104 million to 106.5 million barrels a day over the next five years—may not be welcomed by oil producers in Texas and New Mexico. US domestic crude is predominantly light and sweet, which can be processed by any refinery but risks oversupplying the gasoline market. As the summer driving season concludes, industry concerns are already shifting toward diesel and jet fuel availability.

The agreement is not without potential legal hurdles. Kloza notes that international litigators may raise challenges regarding the deal’s validity both within Venezuela and among Western nations. However, the current absence of violence in Venezuela offers a baseline of stability for the oil fields and utilities. Should the US secure a particular percentage of the oil, there is also the potential to refine and export it, with countries like China identified as potentially desperate buyers.

The deal could also trigger seismic shifts in global energy alliances. The unprecedented nature of the agreement raises questions about whether Venezuela will remain in the OPEC cartel. OPEC’s influence has already been damaged this year following the departure of the United Arab Emirates, with Iraq reportedly on the fence. A cartel reduced to six or eight members is significantly less potent than one with a dozen, a development many free-market advocates would welcome.

Looking ahead, domestic refining reliability remains a focal point. US refineries have operated at over 95 percent capacity for 20 consecutive weeks. However, much of this added refining infrastructure is concentrated in the Gulf of Mexico, leaving it vulnerable to hurricane disruptions. Unlike two decades ago, when the US was largely self-reliant, the nation now exports approximately one million barrels a day of gasoline and two million barrels a day of diesel to roughly 40 countries.

Finally, while the US gains access to Venezuelan reserves, the fate of Venezuela’s domestic infrastructure remains uncertain. Twenty years ago, the country boasted a robust refining system capable of processing 1.5 million barrels a day. Today, that system is in severe disrepair, leaving observers to wonder whether rehabilitation of those facilities will become a future component of the bilateral relationship.