Experts doubt Venezuela oil deal will quickly cut gas prices

President Donald Trump says a new U.S. oil agreement with Venezuela will “substantially lower Gas Prices for all Americans,” but energy analysts say drivers should not expect relief at the pump anytime soon.

The Trump administration announced Friday that the United States had reached an agreement tied to the development of 17 strategic oil fields in Venezuela, a country with the world’s largest proven oil reserves. Venezuelan state media reported that the fields hold proven reserves of 65 billion barrels of oil. Trump called it the “biggest oil deal in the world” on Truth Social.

A U.S. official told CBS News the deal is structured as a private joint venture and that the U.S. government will control 55% of it, split between equity and the ability to obtain oil at cost. An official who spoke to NPR on condition of anonymity said the U.S. would get 55% of the oil from the joint venture, equal to about 65 billion barrels still underground.

Venezuelan President Delcy Rodríguez said the country granted a 100-year concession to operate in the 17 fields. In a televised address Saturday night, Rodríguez said the agreement is good for the Venezuelan people, though NPR reported that some Venezuelans are questioning whether the terms are fair.

Energy experts said the agreement faces major practical, legal and political hurdles. Many of the oil fields in question are largely undeveloped, and new fields can take years to produce. Global Energy Monitor, a nonprofit that tracks energy infrastructure, says new fields can take 15 years after discovery to begin producing oil. Tracy Shuchart, CEO of commodity analytics firm Hilltower Resource Advisors, said in a social media post that it could take five to 15 years before enough Venezuelan oil reaches the U.S. to affect domestic gasoline prices.

“The initial reaction is, ‘wow, this is crazy,’” Paasha Mahdavi, an associate professor of political science at UC Santa Barbara who studies the oil industry, told NPR. “But then you look into it, and you’re like, ‘well, this may not actually do anything.’”

The structure of the deal is also unusual. Francisco Monaldi, director of the Latin America Energy Program at Rice University’s Center for Energy Studies, told NPR that the U.S. government becoming a shareholder in such a venture is “extremely unusual.” Gerald Kepes, president of Competitive Energy Strategies, noted that the United States does not have a national oil company.

“We have no government-owned operational capability per se in the oil and gas sector,” Kepes told NPR. “The question is, who’s going to operate on the ground?”

Analysts also questioned whether major U.S. oil companies would commit capital in Venezuela. Chevron remains the only American oil company actively producing oil there, CBS News reported. Other major firms left years ago after former Venezuelan leader Hugo Chávez nationalized the oil industry, and ExxonMobil and ConocoPhillips later won compensation claims over confiscated assets.

UBS analysts said in an Aug. 31 report that the venture faces legal and operational obstacles and is unlikely to boost production in the near term. “From a U.S. oil company’s perspective, any significant investment in Venezuela would generally need to be accompanied by a legal framework that could survive a change in leadership in both the U.S. and Venezuela,” they wrote.

Venezuela has just over 300 billion barrels of proven oil reserves, compared with less than 50 billion in the United States, according to the U.S. Energy Information Administration. But its oil industry has suffered from years of underinvestment, and experts estimate at least $100 billion would be needed to restore its fields to full capacity. The country produced about 1.1 million barrels a day in the second quarter, up from 941,000 barrels a day in 2025, according to OPEC data cited by CBS News.

Trump is scheduled to meet Tuesday with U.S. energy refiners and distributors to discuss the Venezuelan agreement, White House spokeswoman Taylor Rogers told CBS News. Secretary of State Marco Rubio said on social media that the project is expected to attract nearly $100 billion in private investment and support thousands of jobs.

For now, analysts say other forces are more likely to affect gas prices. CBS News reported that oil prices rose after the U.S. attacked Iranian rocket launchers in the Strait of Hormuz, with West Texas Intermediate rising $2.42, or 2.9%, to $85.78 a barrel Monday.

The Venezuela deal could be “helpful in the long run, but it’s not going to do anything to change the price of gasoline at the retail station for Labor Day weekend,” Amy Myers Jaffe of New York University told The Associated Press.