Trump’s Venezuelan Oil Deal Is a Big Gamble

At the end of August, President Donald Trump announced a major deal with the government of Venezuela. The agreement would give the U.S. functional control of about 20 percent of Venezuela’s oil, which equates to over 65 billion barrels—or almost one and a half times more oil than the United States has in its own current proven reserves (which total approximately 46 billion barrels).

The vehicle for the deal is the North American Blue Energy Partners (NABEP), a corporation controlled by Venezuelan businessman Alejandro Betancourt that has concessions across 17 of Venezuela’s oil fields. The U.S. government, acting through the Pentagon’s Office of Strategic Capital, will assume a 35 percent stake in Betancourt’s company; additionally, it will have veto power over appointments to NABEP’s board of directors (the majority of which positions will be required to go to U.S. citizens). Washington will also be guaranteed 20 percent of the concession fields’ production, as well as the right of first refusal for the remaining 80 percent. According to the White House, this will allow the U.S. to refill the Strategic Petroleum Reserve and guarantee American energy security.

Trump, ever the dealmaker, appears to view this as the capstone of his Venezuela policy. Superficially, it bears the hallmarks of a triumph for a kind of crude foreign policy realism: American hard power, deployed narrowly, forced cooperation from a previously hostile neighbor and secured material benefits for the United States.