RESOLVING THE LEDGER
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President Trump on Friday said a U.S. deal with Venezuela to tap its oil reserves "will substantially lower Gas Prices for all Americans, long into the future." With the average U.S. gas price still above $4 a gallon nationwide, American consumers may be wondering if help is on the way.Don\u0027t hold your breath, energy experts said.\u00a0The agreement with the U.S. involves the development of 17 strategic oil fields in Venezuela that hold proven reserves of 65 billion barrels of oil, Venezuelan state media reported\u00a0on Saturday. Although tapping the crude could eventually lead to more oil flowing to the U.S., new fields can take 15 years after discovery to begin producing oil, according to Global Energy Monitor, a nonprofit that tracks energy infrastructure.\u00a0That timeline may even be on the optimistic side, the group added, citing geopolitical risk and the nature of Venezuela\u0027s oil. The country\u0027s so-called heavy crude is harder to refine into gas than the light crude U.S. refiners typically process.\u00a0Even more bullish forecasts are measured in years. Tracy Shuchart, CEO of commodity analytics firm Hilltower Resource Advisors, said in a social media\u00a0post that it could take five to 15 years before enough Venezuelan oil flows to the U.S. to affect domestic gas prices.The announcement is "a signal that the White House remains concerned about elevated fuel prices \u2014 though in reality, any benefits from increased Venezuelan output will take years to fully materialize and are unlikely to move the needle in the near term," GasBuddy petroleum analyst Patrick De Haan said in a Monday research note.\u00a0Meanwhile, the U.S.-Venezuela oil venture faces potential legal and operational obstacles, making it unlikely to boost oil production in the near term, analysts with investment bank UBS said in an Aug. 31 report.Boosting production will take timeVenezuela has the world\u0027s largest proven oil reserves, at just over 300 billion barrels, according to the U.S. Energy Information Administration. By comparison, the U.S. has less than 50 billion barrels.Venezuela\u0027s oil industry has suffered from years of underinvestment, with experts estimating that at least $100 billion is needed to restore its oil fields to full capacity. The country has boosted its oil production this year to about 1.1 million barrels a day in the second quarter, up from 941,000 barrels a day in 2025, according to the latest OPEC data.\u00a0"The performance of Venezuela\u0027s oil sector so far this year underscores that expanding production is no easy feat," UBS said. "Roughly eight months after former Venezuelan president Nicol\u00e1s Maduro\u0027s removal from office, Venezuelan petroleum output is up by just 100-200 thousand barrels per day from a very low base."The U.S.-Venezuela deal is structured as a private joint venture, with Venezuelan President Delcy Rodr\u00edguez saying the country granted a 100-year concession to operate in the 17 oil fields. The U.S. government will control 55% of the joint venture, split between equity and the ability to obtain oil from it at cost, a U.S. official told CBS News.\u00a0The project is expected to attract nearly $100 billion in private investment to Venezuela and support thousands of jobs, Secretary of State Marco Rubio said on social media on Friday.The deal appears to pave the way for the private sector to invest in Venezuela\u0027s industry, Bob McNally, a former energy adviser in George W. Bush\u0027s White House, told The Associated Press.\u00a0Even after the U.S. intervention in Venezuela in January, Chevron remains the only American oil company actively producing oil in Venezuela. Other major oil companies exited the country years ago after former Venezuelan leader Hugo Ch\u00e1vez nationalized the country\u0027s oil industry.\u00a0ExxonMobil and ConocoPhillips later successfully sued for compensation for the confiscation of their assets.\u00a0That history may make oil companies hesitant to re-enter Venezuela, even under the current agreement, the UBS analysts said."From a U.S. oil company\u0027s 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. "Companies such as ExxonMobil and ConocoPhillips are still owed significant amounts under legal judgments related to assets previously expropriated in Venezuela."They added, "Ultimately, investments in Venezuela would have to compare favorably on a risk-adjusted basis with alternatives around the world."White House meeting with oil companiesMr. Trump is scheduled to meet with U.S. energy refiners and distributors on Tuesday to discuss the Venezuelan deal, White House spokeswoman Taylor Rogers told CBS News.\u00a0"President Trump is laser-focused on ensuring his successful energy dominance agenda translates into the most cost savings possible at the pump for consumers," she said. "As part of that commitment, the President will meet with industry leaders to collaborate on the best ways to increase refining capacity, further unleash American energy dominance across the entire supply chain and bring down prices for the American people."\u00a0For now, the Iran war\u00a0is having a greater impact on gas prices than the agreement with Venezuela. Oil prices rose Sunday after the U.S. attacked Iranian rocket launchers in the Strait of Hormuz. The price for a barrel of West Texas Intermediate, the U.S. benchmark, rose $2.42, or 2.9%, to $85.78 a barrel on Monday.The U.S.-Venezuela deal could be "helpful in the long run, but it\u0027s not going to do anything to change the price of gasoline at the retail station for Labor Day weekend," Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, told AP.
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