Will the unusual oil deal between the U.S. and Venezuela work?

0:00It's Consider This, where every day we go deep on one big news story. President Trump is calling it the biggest oil deal in world history. Over the weekend, Trump announced his administration has made an agreement to take majority ownership over several Venezuelan oil fields. The president says it will give the U.S. control of 65 billion, that is billion with a B, barrels worth of oil. Venezuela recibe a cambio. In her own announcement, interim Venezuelan President Delcy Rodriguez said the deal would help revive her nation. Venezuela was once a global oil powerhouse and is home to vast reserves, a potential President Trump mentioned specifically after he ordered an attack on that country's capital in January.

0:42We're going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country. That U.S. military raid on Caracas earlier this year resulted in the capture of Nicolás Maduro, the country's leader. Rodriguez, who was Maduro's deputy, has remained in power, and Trump frequently praises their close business relationship. Meanwhile, a growing number of Venezuelans are calling for elections, and some are expressing skepticism and concern about U.S.

1:22exploitation, as heard here in video published by the Associated Press.

1:33All the United States wants is to take the oil, Venezuelan grocer Jose Riera says. Nothing more. Consider this. Six months after starting a war in the Middle East and with gas prices up, President Trump sees this as a way to ease prices and bolster America's economic fortunes. But so far, this deal raises far more questions than answers.

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3:16It's Consider This from NPR. The agreement with Venezuela positions the U.S. federal government as a direct investor in a private industry and comes on the heels of rising gas and oil prices due to the war with Iran. I spoke with Julia Simon, NPR's energy and climate correspondent, and I asked her to explain what this oil deal is and what it is not. So NPR spoke with a U.S. official who was not authorized to speak publicly about the agreement. The official said the U.S. has secured 55 percent of the effective output of a new private joint venture between a private company in Venezuela and the U.S.

3:53government. Again, the number we're hearing is that the U.S. would have control of 65 billion barrels of oil. Now, this may sound like a lot, but Pasha Madhavi, he's associate professor of political science at University of California, Santa Barbara, and he says there's more to the story. My initial reaction of Trump announcing taking 65 billion barrels is quite a shock. I mean, in context, that's a huge amount of oil. It's 20 % of the country's proven reserves. But then, you know, upon reflection, you start to look at the deal and you say, well, is Trump actually taking these oil reserves? Is the U.S.

4:35nationalizing Venezuela's oil? The answer is no. Okay, so if Venezuela still owns this oil, you know, what does that mean? Yeah, this oil is still underground. Right now, Venezuela still owns it. the new company would then extract that oil, Joel, and then the U.S. would get control of 55 % of the output. But this type of deal that the U.S. government is talking about, it often isn't that attractive to international oil companies who play key roles because of their expertise and their investment. It's not clear who will rush in for this opportunity. And we reached out to Chevron, ConocoPhillips.

5:11They declined to comment. ExxonMobil did not respond to our request for comment. In his Truth Social post, President Trump wrote that the deal will, quote, substantially lower gas prices for all Americans long into the future, unquote. I think that is a question a lot of people will be asking today. Is this going to reduce gas prices? Right. It's definitely the question. And oil experts say the idea that this deal would reduce gas prices was, quote, absurd. It's not clear when this oil would actually be produced. Again, And it's oil in reservoirs. It's underground. We're not talking about crude oil that's sitting in storage.

5:46And we're talking about oil that could take at least one to two years to produce, up to 10 years to produce. So there is no connection to gas prices right now. It sounds like there is a lot about this deal that is highly unusual. How solid do you think it is? Well, right now, this deal is being made with acting. Venezuelan President Delcy Rodriguez, who was installed after the U.S. sees President Nicolás Maduro in January, Delce Rodriguez hasn't been elected. There's a lot of questions about how legitimate this government is and what's the government going to look like in three to five years when this oil really starts coming online.

6:22I spoke to Gerald Kepes about this. He's president of Competitive Energy Strategies and Energy Consultancy in Washington, D.C. Trump in his announcement said that Secretary of State Marco Rubio and Defense Secretary Pete Hegseth were involved in the deal, Kepes finds that very strange. When has the Department of Defense or War ever been involved with anything like this? Kepes says there are a lot of overarching questions about the legal standing of a deal like this. NPR's Julia Simon. Thank you very much, Julia. Thank you, Joel. This episode was produced by Henry Larson. It was edited by Sarah Robbins and Catherine Laidlaw.

7:02Our director is Jason Fuller. And our interim executive producer is Courtney Dorning.

7:16It's Consider This from NPR. I'm Joel Rose.

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