In a blatant display of imperialist power and blatant plunder of the natural resources of a sovereign country, the US is achieving what it set out to do when it stormed the presidential residence of Nikolas Maduro one night and removed him from the presidency and his country: it is seizing Venezuela’s oil.
In a move that solidifies the US’s hegemonic presence in Latin America, the US side has proceeded to appropriate the exploitation of Venezuela’s oil wealth.
The US president claimed that the United States had just reached an agreement with Venezuela for the largest oil deal in world history and that the deal would more than double US oil reserves and, in the long term, significantly reduce gasoline prices for all Americans.
Washington gains control of Caracas’ reserves
Donald Trump announced the signing of an agreement to develop 17 strategic fields with proven reserves of 65 billion barrels.
The US president said the US side had secured “majority control” of these resources, describing the agreement as the largest oil deal in world history, which is being carried out at no cost to US taxpayers.
For her part, acting president Delcy Rodriguez confirmed the agreement, noting that the projects involved involve investments exceeding $100 billion and are expected to generate tax revenues of more than $209 billion for the state.
“At my direction,” Trump said, “Secretary Rubio and Secretary of Defense, working closely with the highly respected Interim President of Venezuela, Delcy Rodriguez, and through partnerships with the private sector, have secured majority ownership of more than 65 billion barrels of proven oil in Venezuela for the United States, at no cost to American taxpayers.
This historic agreement will more than double America’s oil reserves, dramatically increase our oil supply, and in the long term, significantly lower gasoline prices for all Americans, while helping to continue Venezuela’s path to extraordinary success and great prosperity.
This agreement will further strengthen the growing relationship between Venezuela and the United States. Thank you for your attention to this unprecedented issue.”
100-year exploitation rights and channeling of the produced oil to the US military needs
Under the agreement, the exploitation of the 17 fields is granted to a new private company for a period of 100 years.
The US will receive 55% of the “effective volume” of production, a percentage resulting from participation in the capital and the right to purchase part of the extracted oil at cost price.
The oil acquired under these terms is intended to strengthen the US Strategic Petroleum Reserve and meet the needs of the US armed forces.
The change in the political landscape and the adaptation of the institutional framework to the demands of foreign groups
This development was made possible after the dramatic turn in Venezuelan political affairs on January 3, when US military forces arrested President Nicolas Maduro and his wife Cilia Flores, transferring them to the United States to face federal charges that he himself does not recognize.
After his removal, the appointed Delcy Rodriguez assumed the presidency, while the Trump administration immediately pressed for the return of American companies to the country.
At the same time, the authorities in Caracas proceeded with a broad reform of oil legislation, allowing private and foreign groups to enter into new contracts, to independently sell the oil produced and to manage their revenues, at a time when Washington was relaxing restrictions on the sector.
Possible withdrawal from OPEC and shocks to international energy balances… major geopolitical reshuffle
In the context of the rearrangement of relations with the US, Venezuela is seriously considering the possibility of withdrawing from OPEC, a matter that was discussed in contacts with American officials.
Any implementation of this scenario would be a historical turning point, as the country has been a founding member of the organization since 1960, along with Iran, Iraq, Kuwait and Saudi Arabia.
Such an exit would make Venezuela the first founding state to abandon the organization, weakening the front of traditional oil-producing countries.
Venezuela’s imminent withdrawal from OPEC after the agreement with Washington does not simply represent a change of balance within an international organization, but completely redraws the global energy map.
The exit of a country that holds the largest proven crude reserves on the planet effectively nullifies the cartel’s ability to control global supply.
Winners and losers
The winners include the US and Western oil companies because they gain long-term access to giant deposits, fill their strategic reserves and weaken OPEC’s influence on international prices.
Theoretically, consumers also benefit because increasing production without quota restrictions pushes crude prices down, giving the pump a breather.
The losers undoubtedly include Saudi Arabia and Russia as well as OPEC+ because they lose the monopoly ability to regulate supply and keep prices artificially high through production cuts, but also OPEC unity, which is now facing an existential crisis, as after the UAE and Venezuela, an uncontrolled price war between members is threatened.
- The strategic dominance of the US
For Washington, the agreement with Caracas and the lease of the oil fields constitute a geopolitical triumph. American oil companies take control of vast infrastructure, while the American refining system ensures cheap crude oil.
At the same time, American strategic reserves are replenished without the grip of decisions from Riyadh or Moscow.
- The weakening of the Saudi-Russian axis
OPEC+, led by Saudi Arabia and allied with Russia, relied on the cohesion of its members to impose production cuts and keep oil prices high.
With the independence of Venezuela and the previous withdrawal of the UAE, this strategy is collapsing. If cartel members start producing unchecked to maintain their market share, the cartel risks becoming a mere cosmetic organization with no real power.
- What this means for fuel prices and the pump
For consumers worldwide, the release of Venezuela’s production from OPEC quota commitments is a positive development.
The release of millions of additional barrels into the market is creating an oversupply. This is expected to hold down or even significantly reduce international oil prices, translating into lower gasoline and diesel prices at the pump.
- Will OPEC collapse?
The risk of OPEC collapsing is real, as dissatisfaction with production quotas is accumulating dangerously.
It is estimated that the cartel members will not necessarily announce an abrupt dissolution, but will follow the strategy of gradual and uncontrolled increase in quotas, effectively rendering the organization’s restrictions useless.
