The Pentagon Just Bought Into Venezuelan Oil
Venezuela proven oil reserves (world rank 1)
303 billion barrels
Saudi Arabia proven oil reserves (world rank 2)
267 billion barrels
Venezuela daily output in 2020 (record low)
337,000 barrels
Venezuela daily output today (July 2026)
1.1 million barrels
Fields covered by the NABEP deal
17 oil fields
Proven reserves covered by the deal
65 billion barrels
Duration of rights granted by Venezuela
100 years
Pentagon ownership stake in the joint venture
35%
Infrastructure investment pledged by Betancourt
$100 billion
More Oil Than Saudi Arabia, and Almost None of It Gets Out
Venezuela sits on the largest proven crude reserves on the planet: 303 billion barrels, compared with Saudi Arabia's 267 billion and Iran's 209 billion. It is nearly one fifth of everything underground worldwide. And yet, for most of the past decade, Venezuela has struggled to pump more than a million barrels a day. At its peak in 2002, Venezuela produced close to 3 million barrels a day. Then came years of state mismanagement, the collapse of PDVSA's workforce, US sanctions imposed in 2019, and a political crisis that saw Maduro cling to power while the industry rotted. By June 2020, production had fallen to just 337,000 barrels a day, the lowest since the 1940s. Only in 2026, after the Trump administration's January capture of Maduro and a sweeping reopening of the sector, has output crossed 1 million barrels again. Now the US government is not merely watching Venezuela recover from the outside. It is a 35 percent owner of the company doing the recovering.
The Deal: One Hundred Years, Sixty-Five Billion Barrels
The agreement, disclosed in full by the White House on August 31, works like this. North American Blue Energy Partners (NABEP), owned by Venezuelan businessman Alejandro Betancourt, is already the second-largest oil operator in Venezuela after Chevron, with more than 5,000 employees. Venezuela's interim president Delcy Rodriguez granted NABEP 100-year extraction rights over 17 oil fields with 65 billion barrels of proven reserves. Many of those fields were previously controlled by Russian or Chinese firms, or by companies tied to Maduro and Hugo Chavez.
The Pentagon as Shareholder
The US government takes a 35 percent ownership stake in the new joint venture, managed through the Pentagon's Office of Strategic Capital and signed by Defence Secretary Pete Hegseth and Secretary of State Marco Rubio. The State Department also secures the right to purchase 20 percent of all output at cost. Betancourt's company commits to $100 billion in new infrastructure. The White House calls the US government's entry cost zero. Trump called it "the biggest oil deal in history." Betancourt said it would "unleash that potential to the great benefit of both Venezuelans and Americans."
What Russia and China Just Lost
The geopolitical logic of the deal runs deeper than oil prices. Many of the 17 fields now assigned to NABEP were previously operated by Russian and Chinese companies. Moscow and Beijing had filled the vacuum left by Chevron, ExxonMobil, and ConocoPhillips after the nationalisations under Chavez and the departure of Western firms during peak-sanctions years. ExxonMobil and ConocoPhillips, both of whom had Venezuelan assets seized under Chavez, are still sitting out. The US is effectively reversing a decade of energy influence that Russia and China built in Venezuela, using a private joint venture rather than direct state appropriation. Whether that distinction will survive a future Venezuelan or American administration is a question analysts are already asking.
"President Trump's effort to turn the US military into an investor in Venezuelan oil is a blatant abuse of power and taxpayer dollars.
"Senator Jack Reed. Ranking Member. US Senate Armed Services Committee.
Why This Does Not Fix Gas Prices Next Month
The national average for gasoline in the US stood at $4.08 per gallon as of September 1, up 28 percent from a year earlier. Most of that rise traces to the disruption of Gulf oil flows through the Strait of Hormuz. The Venezuela deal does nothing for that in the near term. Former US energy advisers are blunt: reviving Venezuela's dilapidated infrastructure takes years. PDVSA's pipelines and wells have not been properly maintained in over a decade. Current production is still less than 40 percent of the country's 2002 peak. Even Chevron, which operated through the entire sanctions era, is only now pushing its Venezuelan output toward 260,000 barrels a day, with a target of 375,000.
The Question No One Has Answered
Analysts note that a future US or Venezuelan administration could challenge the deal. A 100-year contract granted by an interim government, over fields that were themselves acquired from Russian and Chinese interests in contested circumstances, is not a standard commercial arrangement. Sen. Jack Reed is not the only one asking who authorised it and under what legal framework.
