Inside the U.S. Deal to Get Venezuela’s Oil

0:05On Friday night, President Trump took to Truth Social with a surprising announcement. He said that the U.S. and Venezuela had just agreed to, quote, the biggest oil deal in world history. Breaking news tonight, President Trump boasting of a huge oil deal on social media. In fact, he's calling it. No one really knew that this was happening. We were all really, really surprised when this came out. Our colleague Vera Bergengruen covers national security. So we've been hearing rumblings that there was some kind of major oil deal about to be announced. We thought it was going to be oil companies or something new on that front.

0:42But what it basically ended up being was a very, very unusual deal announced by President Trump that the U.S. government itself was going to be taking a stake in the oil business in Venezuela.

0:55Venezuela is giving a private company the rights to develop these enormous oil fields. And the U.S. government itself, through the Pentagon, is taking a stake in that company. So they basically are themselves becoming an investor in Venezuelan oil. And that's highly unusual. Yes, this has never really been tried before. And again, the mechanism through which it's being done, through the Pentagon, also is something that people were very, very surprised by.

1:26The oil deal comes at a sensitive time for the Trump administration. As the war in Iran drags on, gas prices stay high and voters get ready to go to the polls. And from my conversations with people involved in this, the Trump administration is really trying to use this as a hedge against the chaos in the Middle East because of Trump's decision to go to war with Iran. And Trump has said that he's going to use this oil to refill the U.S. Strategic Petroleum Reserve and have, you know, all these grand plans. But most of this is not going to happen until way after he's out of office.

2:03Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, September 1st.

2:16Coming up on the show, Trump's unusual deal to get Venezuelan oil.

2:29This episode is brought to you by Indeed. The right hire can make or break your company, especially if you're a small business. And relying on luck to find that person isn't really the best strategy. But you know what is? Using Indeed Sponsored Jobs. You can use it to boost your job post to make sure it reaches more people with the right talents, certification, location, and more. Sponsored Jobs posted directly on Indeed are 95 % more likely to report a hire than non-sponsored jobs. Spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results.

3:01When you need the right person to cut through the chaos, this is a job for Indeed-sponsored jobs. And listeners of this show will get a$75 sponsored job credit to help get your job the premium status it deserves at Indeed.com slash podcast. Just go to Indeed.com slash podcast right now and support the show by saying you heard about Indeed here. Indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs. This episode is supported by Anthropic, the public benefit corporation behind Claude. People have hard questions about AI, what happens to jobs, whether their kids end up better off.

3:40Anthropic asked over a hundred thousand people their thoughts on AI and is tracking in public what it does about them and where they might not have the answer just yet. There's hope in hard questions. Ask yours at claude.ai slash the journal.

4:02Venezuela is home to the world's largest oil reserves. The country says it has some 300 billion barrels of proven reserves. By comparison, the U.S. has an estimated 46 billion barrels.

4:19The Trump administration has had its eye on Venezuela's oil for a long time. So the president, even before he decided to take out Nicolás Maduro, was talking about how, you know, one of his biggest interests in this country was the oil and securing a reliable source of crude in the Western Hemisphere, especially as, you know, things in the Middle East are very unstable on and off. After Maduro's ouster in January, he was replaced by Delce Rodriguez, his vice president. That same week, Trump gathered American oil executives at the White House and pressured them to start drilling. I am delighted to welcome almost two dozen of the biggest and most respected oil and gas executives in the world to the White House.

5:05So they really tried to incentivize U.S. oil companies to come in. And U.S. oil companies for a long time really wanted to get back in. But all these oil companies that we've seen meet with the president at the White House and, you know, kind of give their statements about how they're very interested, they needed more security. They wanted security guarantees. They want legal reforms, judicial reforms.

5:29Why do these companies feel they needed those guarantees, those reforms? Despite taking out President Maduro, you know, Venezuela is incredibly unstable. It is dangerous. There's a lot of armed groups around a lot of these oil fields. Things are rusting. There hasn't really been much infrastructure change. There hasn't been big security changes or government changes. So they just want to see more of that before they feel comfortable taking the risk of making such big investments. And a lot of them really were putting the brakes on this with their own statements. Like the CEO of Exxon, who said that his company couldn't invest in Venezuela in its current state.

6:04If we look at the legal and commercial constructs and frameworks in place today in Venezuela, today it's uninvestable. And, you know, that really frustrated the president. And over the last eight months or so, there have been quite a few reforms and things have been moving, but way too slowly for what he wanted. However, since Maduro's removal, Trump has claimed that the U.S. was already seeing benefits. Billions and billions of barrels of oil is coming out of Venezuela. Over 100 million barrels already is in Houston, refined and out, and paid for that war many, many times over. It's been very striking to hear the president's statements because, you know, of course, he hasn't talked much about democracy.

6:47He does kind of revel in being seen as the liberator of Venezuela. But by President Trump's own telling, the oil has been flowing, and most importantly, America has been hugely benefiting. According to Vera's reporting, Venezuela is selling oil, and the U.S. is controlling the process. But so far, that money hasn't actually come to the U.S. I think it's really important to note that you can't separate what's happening in Venezuela from what's happening from the fallout of Trump's decision to go to war with Iran. It was only a month and a half later that he decided to go in, and the U.S. really got stuck.

7:25You know, the Strait of Hormuz was closed. It really impacted global energy markets. It really impacted the bottom line for many Americans. I don't like these endless wars. This is not an endless war. We've been doing this for three months. And if you notice, every time Trump is asked about Iran, he privets back to Venezuela. Hey, we took over a very powerful country, Venezuela, a lot of soldiers, big, strong military. We took over Venezuela in a matter of minutes. We destroyed the capability of Iran in a matter of days. Nobody's ever seen anything like it. Now I'm going to finish it. And because he kept talking about it in these really maximalist terms, a lot of the people around him were looking at this and trying to figure out how can we really put some teeth behind this notion that the U.S.

8:15is actually accessing all this oil and that it's going to be a long-term thing that is going to benefit the American people. Vera's reporting shows that over the past few months, administration officials worked to turn the president's repeated claims about getting Venezuelan oil into a reality. So how did the Trump administration make it happen? How did the deal come about? You know, about six months ago, things really started moving. They were trying to figure out how they could really accelerate things, how they could, you know, just force more of this investment to happen more quickly, especially if the U.S.

8:51oil companies were reluctant. And they started trying to figure out how they could use the backing of the U.S. government to assure private investors that their investments were worth it, basically. And who could be someone who could really make this come true for them? And so who was involved in these talks? So within the U.S. government, the Energy Secretary, Chris Wright, who went to Caracas, Marco Rubio, the Secretary of State, and strangely enough, the Pentagon, which was brought in rather late, but it has an obscure office that they realized could help called the Office of Strategic Capital, OSC, which most people had never heard of.

9:26A lot of the negotiators said they'd never heard of it. A lot of my colleagues said they'd never heard of it. It also doesn't tell you anything, the name. It tells you nothing, exactly. The Office of Strategic Capital was created under the Biden administration in 2022. It was built to work like a bank to secure financing for supply chains crucial to national security. And it was run by the Pentagon. Through that obscure office, the Trump administration saw an opportunity. They decided to do something very unusual, which was treat access to Venezuelan oil as a national security matter, as a strategic asset.

10:00And basically, they found a loophole where they could claim that and then use this office as their preferred mechanism to have the U.S. government take a direct stake in Venezuelan oil. So that's the U.S. side. Can you just talk about who's involved in the deal on the Venezuelan side of things? The person they settled on is Alejandro Betancourt. He's a controversial Venezuelan businessman who made a fortune doing business during the Chavez era. Alejandro Betancourt runs a company called North American Blue Energy Partners. It's the second largest private oil company in Venezuela. So he's part of this generation of really wealthy Venezuelan dealmakers.

10:36In other words, they're called the bolichicos. And they're people who really benefited from their connections with Chavez to make a lot of money.

10:47Betancourt had lived in Europe, where he'd faced criminal investigations for alleged money laundering and corruption. He was never charged. Because of his connections, Betancourt had been a behind-the-scenes person for a while with some of these Trump-linked officials or operators. You know, he had a line-in to Delsey Rodriguez. He was talking to her already as the U.S. was getting ready to take out Maduro. What made him attractive to the administration and the argument that people made to Trump and to the White House was that he had something that all these big American oil companies didn't. He already had operations on the ground.

11:22He had these relationships in Caracas. But more importantly, he had the willingness to move extremely quickly without as much of a concern for the risks. You have the Pentagon and the State Department on one side, and then Betancourt and then Delcea Rodriguez on the other. What's actually in the deal? How does it work? We're still unraveling a lot of the details of how this is actually going to work. But for what's on paper right now that we have reported and the White House has confirmed, the U.S. basically gets a 35 percent stake in this company owned by Betancourt. And then they get the right to buy 20 percent of its oil production at cost.

12:01So basically, they get first dibs and they get to do it more cheaply. And by doing that, they get access to a lot of this oil in a way that Trump can really sell. A spokesman for North American Blue Energy Partners said the company doesn't comment on commercial matters. Under the terms of the deal announced by the Trump administration, Betancourt's company would have an opportunity to develop 17 oil fields said to contain 65 billion barrels of oil, or one-fifth of the country's reserves. And the Pentagon would help finance it. The way we understand the deal now, the U.S. essentially gets three big things.

12:38They get a piece of this company, they get cheaper access to oil, and then they get substantial control over where that oil goes. And this is where the president says it's really going to translate to tangible benefits to Americans. And he says it's going to be very soon, which is something that experts tell us is impossible. But the White House has been celebrating this deal as a huge success. We've seen the State Department, Marco Rubio, everyone insisting that this is not just great for Americans economically, but for national security. U.S. officials have said that the state-backed company would become a huge corporate holder of proven reserves, second only to Saudi Arabia's state-owned oil company.

13:17Still, the deal is facing some big challenges, including whether or not it's even legal under Venezuelan law. That's after the break.

13:46and it turned out the seller was super chatty, kind of funny, and an avid cyclist. The next thing you know, you're in a cycling crew. Well, a community cycling group. The thing about Facebook, you might find more than what you're looking for. From a browse to a bike ride, this summer, find more on Facebook.

14:12Since the 1970s, Venezuela's oil industry has been controlled by the state. That arrangement was later written into the country's constitution. Venezuela is coming out of almost three decades of this socialist government, which built itself on oil and that, you know, it's only for the benefit of the Venezuelan people. And Venezuela's constitution says that the country's reserves belong to the state and they can't be transferred to a foreign government, to a private company. They belong to the state and they should be administering this. For decades, the country touted its oil reserves as the main source of its wealth, which is why a deal that potentially gives the U.S.

14:49access to Venezuela's oil reserves hit a nerve.

14:55So, of course, now a lot of people are saying that, you know, this really does appear to be in conflict with the Constitution, what Trump and Rodriguez have agreed to. But also, just as importantly, one of the biggest issues hanging over all of this is that the government that is agreeing to this was never elected. International observers, including the U.S., have said that the Maduro government didn't legitimately win the election that brought it to power in 2024. But when Maduro was ousted, much of his government stayed in place. And the Trump administration supported Delce Rodriguez as interim president.

15:33She's only being kept there because Trump likes her, because the U.S. backs her. But again, she was not elected. And not only was she not elected, But the current government is considered illegitimate by much of the international community. So why would the Rodriguez government, the government of Venezuela, agree to this? At this point, the Rodriguez government is only trying to keep itself in power. The way that it was put to need by White House officials was, you know, we informed her this was happening. She is cooperative. But as for Rodriguez, you know, she is selling this to the public as, you know, huge amounts of investments, big number of jobs.

16:09and that this is going to be really critical for them to see benefits. But, you know, ultimately what's happening is that she is going to do whatever the Trump officials tell her to do.

16:21But if Rodriguez is voted out of office in an election, it seems like the deal might not hold up. Exactly. The debate since this deal has been announced and it's been really furious in Venezuela and with a lot of the exile community living on the outside is whether this is in any way a valid deal. And when you speak to White House officials and to U.S. officials, they argue that that's why they did it through a private company. The Trump administration is very adamant that they are not signing this deal with Delce Rodriguez. They are making this deal with a private company, and that private company is dealing with the Venezuelan government.

16:54And that is how they're getting around all of these tricky legal questions. A source involved in the negotiations told Vera that the private company structure was deliberately intended to bind future Venezuelan governments to the agreement and make it difficult to unwind. Can you talk about how the deal has been received so far in the U.S.? We have seen a really interesting reaction, especially from some Republicans, many of whom are rather hardliners when it comes to the current Venezuelan government, which all of them were in agreement for decades was a government they didn't want to deal with.

17:27We've seen a lot of Republicans reluctant to criticize the deal itself because they don't want to criticize the president, but really uncomfortable with the fact that this is entrenching Delcey Rodriguez as the ruler of Venezuela for a very long time, given that now the U.S. practically has a financial stake in keeping her in power. We saw Ted Cruz, the senator from Texas, you know, cautiously praise the deal. I commend President Trump for an agreement that on its face appears to have a really positive economic benefit for America. but say that none of this is going to work if there aren't fair and free elections really soon.

18:05Maduro was illegitimate. He was a Marxist. He had seized power contrary to the will of the voters. And from the beginning, I have been urging, and I believe the administration is working towards this, that there should be free and fair elections. Where does this deal leave U.S. oil companies and how have they responded? From oil executives who spoke to us, U.S. oil companies were not very happy with this. And it was largely because they weren't willing to take the risk at the speed and scale that the president wanted. And now they could basically find themselves competing against a company backed by their own government.

18:41So they're all trying to figure out what this means, even though none of them have really announced that this changes their plans. And then what about for American consumers? What does this mean, ultimately? Will U.S. consumers see lower gas prices from this deal? For American consumers right now, this basically means nothing. And we're seeing the administration really hammering home that this is going to be great. But American consumers from this deal are not going to see or feel anything for many, many, many years. Again, all of this is a potential oil that is still underground. And it's going to take a very long time to really benefit American consumers.

19:18Currently, Venezuela is producing about as much as North Dakota. And, you know, that's an important kind of thing to keep in mind. It's just going to take a very long time to ramp up.

19:31When you step back there and look at kind of the bigger picture, what does this story tell you? I think it really shows how determined Trump is to turn Venezuela into his landmark foreign policy win and also a tangible economic win. Again, he spent months saying that, you know, he took this bold action to remove Maduro and that he secured this enormous supply of cheap oil for Americans. and he is going to use every tool at his disposal to make that closer to a reality, at least one that he can sell. So, you know, he's going to use the Pentagon, the State Department. He's going to work with these controversial businessmen.

20:09But, you know, he really needs to be able to speak about Venezuela as a foreign policy win for the rest of his term. This was a way to really give him something he can point to, even if the benefits to oil companies, to consumers, don't materialize until way after he's out of office.