Oil Prices Surge Despite Trump's Big Venezuela Deal

President Donald Trump stated that the United States has secured majority control of over 65 billion barrels of Venezuelan oil reserves. He announced the deal on August 28, calling it the largest oil agreement in history.

Brent crude did not fall following the news. Instead, it climbed from about $88 to $90.48 by Monday, defying expectations of a supply boost from the deal.

Venezuelan Oil Is Reserves, Not Current Output

The arrangement grants a private venture a 100-year lease on 17 Venezuelan oil fields. A US official told Newsweek that the United States holds a 55% stake in that venture.

Interim President Delcy Rodriguez stated that the fields have proven potential of 65 billion barrels. She also said the venture could attract over $100 billion in investment.

None of that oil is currently being produced. Venezuela's output was over 3 million barrels a day in the late 1990s.

Current production is around 1 million barrels a day, according to OPEC data.

Rystad Energy projects production will rise by only 17% by 2028. That growth requires heavy investment in decayed infrastructure.

Patrick De Haan, head of petroleum analysis at GasBuddy, gave this assessment to Newsweek.

“While the hope of lower gas prices sounds promising, it still will take billions of investment to get that oil.”

Why Oil Prices Rose Despite the News

Brent had fallen from above $93 a barrel in late August. That decline followed easing fears over the Strait of Hormuz.

Goldman Sachs estimated Gulf oil exports at 15 million to 16 million barrels a day, roughly two-thirds of pre-conflict volume. Iran and Oman also reached a revenue-sharing deal on the waterway, but Tehran said it does not guarantee a reopening.

The rebound late Sunday appears tied to that same risk narrative, not to Venezuela. The premium that drove oil for months has not fully unwound. Traders seem to treat the distant Venezuelan barrels as background noise against a live supply threat elsewhere.

Two factors will determine where Brent goes next. One is whether the Middle East risk premium continues to fade. The other is whether Venezuela's oil venture attracts the investment Rodriguez is counting on.