US and Venezuela Sign Landmark Oil Deal in Caracas

The United States and Venezuela formally signed an energy deal in Caracas that Washington says will unlock tens of billions in investment.

The United States and Venezuela have formally signed a major energy deal in Caracas, alongside a series of agreements involving international oil firms. Announced by President Trump on Friday, the arrangement gives the US majority control of one-fifth of Venezuela's oil reserves — which Trump put at 65 billion barrels — through a direct equity stake in a private company led by a Venezuelan businessman. Venezuela's acting president Delcy Rodríguez said the deal will bring in tens of billions of dollars in investment while maintaining the country's 'ownership of and sovereignty' over its natural resources.

The signing marks a striking reversal for a country whose oil industry had collapsed under sanctions and failed policies after years of confrontation with Washington. According to the CBC, the Trump administration pressured American oil and gas executives to invest after the US military attacked Venezuela and captured then-president Nicolás Maduro in January. Analysts flagged a discrepancy between the two governments' characterizations: 'There's a bit of discrepancy about what's going on. It does give you pause,' said Al Salazar of energy analytics firm Enverus. 'Nobody knows what the terms are yet.'

The scale of the challenge is documented in the numbers. Venezuela produced 3.7 million barrels per day at its 1970 peak, but only about 900,000 barrels per day last year after years of declining investment, according to CBC reporting. Infrastructure sits in disrepair: 'Nobody really knows the integrity of these facilities,' reservoir engineer Alex Filstein told the CBC. US Energy Secretary Chris Wright, who attended the Caracas signing, said the deal would unlock tens of billions of dollars in investment and thousands of jobs, with oil production doubling in a decade — claims critics dispute.

Critics say the deal hands Washington control of a fifth of Venezuela's oil reserves and entrenches the current authoritarian government. McMaster University economics professor Colin Mang told the CBC there is 'significant cost risk as well as significant political risk' for investors, noting foreign companies including ExxonMobil have had Venezuelan assets seized twice. Shell, Repsol and Chevron have expressed interest, but a meaningful ramp-up of exports is still five to 10 years away, experts say. The question of whether a future democratic Venezuelan government would honour the deal hangs over its long-term viability.