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Donald Trump, Venezuelan oil, and ‘the 51st state’
As first barrel of Venezuelan crude arrives in the US, controversial oil deal with Caracas is seen by many as US asset seizure
The first shipment of Venezuelan oil has arrived in the US, under the terms of Donald Trump’s opaque and highly controversial deal with the South American nation.
The president claimed that, “the biggest oil deal in the history of the world” with Venezuela’s Washington-backed interim government would bring the US “BILLIONS of Barrels”. But many Venezuelans see it as an illegal surrender of natural resources to enrich a select few, at the behest of a colonial US. Trump further fanned these fears by suggesting that “someday soon” Venezuela might “become a prosperous 51st state”.
What do we know about the deal?
In August, the US announced a partnership agreement with North American Blue Energy Partners (Nabep), a private firm registered in the Bahamas and run by the Venezuelan billionaire Alejandro Betancourt López. The full text of the deal has since become “one of the most sought-after secrets in Washington”, said ProPublica.
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Caracas has given Nabep control of 17 oil fields, and the Trump administration has taken a 35% stake in the firm. The deal allows the US government to purchase its first million barrels of Nabep’s crude oil, with no mark-up, for $30 (£23) a barrel, or less than a third of current market prices, sources told The Washington Post. The US then sells the oil to refineries run by Exxon Mobil and Venezuelan-owned Citgo Petroleum.
“The agreement has raised eyebrows to say the least,” said the BBC. Nabep is “little known” outside Venezuela and Betancourt has been under investigation in five different countries, mainly for corruption and money laundering. The 46-year-old oil baron has never been charged with a criminal offence, and denies any wrongdoing.
What’s in it for Trump?
Oil prices have skyrocketed across the US since the outbreak of war with Iran, while Trump’s approval ratings have fallen to record lows ahead of the midterm elections next week. This first shipment “gives Trump a chance to tout access to cheaper crude as evidence his policies are delivering economic benefits”, said Reuters. US petrol and diesel prices “will soon come plummeting down”, he wrote on social media – “JUST WATCH!”
Trump’s words show “the extent to which the White House is seeking to leverage its influence” over Venezuela for its own “political benefit”, said The Washington Post. But oil experts say the deal is “not expected to have a significant impact” on prices at US pumps. US refiners are already operating at maximum capacity, leaving them little room to scale up, and thick, heavy Venezuelan crude is particularly difficult to refine.
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What’s in it for Venezuela?
Venezuela’s Trump-backed interim leader, Delcy Rodríguez, has insisted that Caracas retains sovereignty over its massive oil reserves. “The benefits” of this oil deal are “endless”, she said, bringing in revenues of more than $209 billion (£154 billion) and turning Venezuela into “an energy powerhouse”.
But the deal has “provoked outrage” across Venezuela’s political spectrum, said The Guardian. One prominent opposition figure called it “a massive land grab” by a “rapacious, mafioso” US.
Harriet Marsden is a senior staff writer and podcast panellist for The Week, covering world news and writing the weekly Global Digest newsletter. Before joining the site in 2023, she was a freelance journalist for seven years, working for The Guardian, The Times and The Independent among others, and regularly appearing on radio shows. In 2021, she was awarded the “journalist-at-large” fellowship by the Local Trust charity, and spent a year travelling independently to some of England’s most deprived areas to write about community activism. She has a master’s in international journalism from City University, and has also worked in Bolivia, Colombia and Spain.
