Venezuela’s Oil Deal: A Geopolitical Win That Falls Short of Rescuing the SPR

Venezuela’s interim President Delcy Rodriguez (R) and US Energy Secretary Chris Wright (L) shake hands as they give a press conference after the signing of an oil agreement at the Miraflores Presidential Palace in Caracas on September 2, 2026. US Energy Secretary Chris Wright oversaw the signing of deals worth “tens of billions of dollars” between Venezuela and oil majors Chevron and ENI as well as with energy company GE Vernova on September 2, 2026. (Photo by Juan BARRETO / AFP via Getty Images)

AFP via Getty Images

There is a profound irony at the core of Washington’s latest agreement with Caracas.

As the United States positions itself to exert influence over billions of barrels of future Venezuelan output, America’s emergency petroleum reserve has simultaneously plummeted to its lowest level in over 45 years—back when it was merely being filled for the first time.

The agreement between the Trump administration and Caracas may ultimately prove significant for long-term U.S. energy policy, but it certainly cannot substitute for the urgent need to refill and repair the Strategic Petroleum Reserve (SPR). Venezuelan crude produced years down the line will do nothing to resolve an immediate supply crisis if the domestic reserve lacks sufficient usable oil or the infrastructure to transport it.

The Promise of Venezuela: What This New Agreement Entails

The White House deal encompasses 17 Venezuelan oil fields containing approximately 65 billion barrels of proven reserves. North American Blue Energy Partners (NABEP), the firm selected to develop this oil, has been offered terms that could evoke memories of an earlier era in the industry’s history.

NABEP will secure 100-year concessions from the Venezuelan government, while the U.S. Department of War’s Office of Strategic Capital will hold a 35% stake in the company. Concurrently, the State Department will retain the right to purchase 20% of current and future production at cost, along with a right of first refusal on the remainder.

NABEP states it will require $100 billion to invest in repairing and upgrading the relevant infrastructure, much of which is currently degraded. This endeavor will also necessitate reconditioning a significant number of existing wells and potentially drilling new ones.

The work involved will be far more extensive, specialized, and costly than standard field upgrades due to the extra-heavy, flow-resistant nature of the oil itself. As detailed in a previous article, a minimum of three to five years will be required to elevate production significantly beyond the 1.2 million barrels per day Venezuela currently produces.

Chevron, which increased its concession output by 12% this year, plans to double that by the end of 2028 to roughly 420,000 bbls/d, rising to around 600,000 bbls/d by the early 2030s. These plans include $7 billion in investments outside the aforementioned 17 fields. While Chevron possesses substantial capital and superior expertise, this will only constitute a fraction of what is needed to restore Venezuela’s output to the 3.4 million bbls/d achieved in 1998—a goal that could easily take a decade or more.

Such figures appear to be a target in the minds of officials in both Washington and Caracas and sound impressive as a projection. However, this depends on investment actually materializing, production progressively growing, oil prices remaining favorable, and the political framework surviving—in short, the realities of above-ground factors.

For Washington, there is a distinct national security dimension. Many of the 17 fields were previously licensed to Chinese and Russian companies under the Maduro regime. Meanwhile, even as the world’s largest hydrocarbon producer, the U.S. remains the second-largest oil importer, trailing only China. Increased Venezuelan oil could reduce dependence on the Persian Gulf and, given current White House priorities, potentially even on America’s largest supplier, Canada.

Facts to Consider Regarding this “Largest Oil Deal in History”

Trump and various officials have made several claims about this deal that warrant factual adjustment.

First, this is not the largest deal in history. For instance, in 1901, British financier William Knox D’Arcy obtained a 60-year concession from the Shah for Iranian oil (estimated proven reserves of 209 billion bbls). Six years later, the deal transferred to the newly formed Anglo-Persian Oil Company—which later became BP—though the deal itself did not survive long.

Second, the deal will not lower oil—and consequently gasoline and diesel—prices anytime soon. The president’s hope that the announcement alone would convince the market of imminent supply increases fell flat. Furthermore, any such possibility was entirely offset by renewed hostilities between the U.S. and Iran in the Persian Gulf and Strait of Hormuz.

Third, the 65 billion bbls would not “double U.S. reserves.” This is simply not how the mechanics work—the oil remains in Venezuela, regardless of who develops it. Additionally, estimates for “proven” U.S. reserves range from 46 to 69 billion bbls, indicating a lack of consensus. The technological revolution, of which “fracking” is only a part, has massively expanded the total likely endowment, a figure still debated. In my own discussions with industry scientists, numbers exceeding 100 billion bbls are mentioned.

Fourth, Interior Secretary Doug Burgum has stated that the deal “shifts the [center] of geopolitics of energy from the Middle East to the Western Hemisphere.” The fundamental issue is that modern energy geopolitics features multiple centers—those for oil, natural gas, coal, nuclear, solar, and wind. For example, Europe depends on the U.S. for up to 58% of its gas imports but 98% of its solar panels.

Finally, Trump stated that “One of the things I am going to do with the Venezuelan Oil is fill up the Strategic [Petroleum] Reserves.” This assertion warrants closer examination.

Can Venezuelan Oil Aid the SPR?

Trump’s promise is valid in one respect: the SPR desperately needs assistance, and quickly.

As of late August 2026, the reserve held just under 290 million bbls, its lowest level since late 1982, representing approximately 40% of its official 714 million bbl capacity. This figure will drop to around 240 million (34%) if Trump approves a final release agreed upon with the International Energy Agency to mitigate the market effects of the Iran War.

Throughout its history, the SPR has seen approximately 500 million bbls withdrawn, with more than two-thirds utilized to offset sudden price spikes—one in 2022 (180 million bbls, related to Russia’s invasion of Ukraine) and another in 2026 (172 million bbls). These drawdowns occurring so close together demonstrated that the SPR could still function under immense pressure.

However, it also highlighted an aging system in dire need of repair. According to a recent, sobering General Accountability Office (GAO) report, triage fixes to SPR infrastructure were required during recent releases due to years of inadequate maintenance. The report notes that the 2022 withdrawal “served as an unplanned stress test of the reserve’s operational capabilities” that proved it operated “well below what the SPR was designed to be capable of in terms of speed and scale.”

Pumps, pipes, electrical equipment, water systems, storage tanks, fire protection, commercial pipelines, and terminals must all function properly. If one link fails, the barrels sitting underground may be virtually useless. There are also issues concerning the wells used for injecting and withdrawing oil from the salt caverns where it is stored, along with the underlying brine (since oil is less dense than water).

Congress has compounded this wear and tear by directing sales of crude from the SPR to fund its own budgetary priorities.

The GAO assesses that the reserve has continued to meet demanding releases, but its ability to do so is increasingly at risk. Currently, there appears to be no clear plan to address the full range of challenges required to bring the reserve fully up to standard—let alone the issue of refilling it.

A Poor Match for SPR Requirements

The notion of refilling the SPR with petroleum from Venezuela’s massive Orinoco Heavy Oil Belt is unlikely to be realized anytime soon, if ever. The reason is not political or economic, but scientific.

Orinoco crude in its raw state is too dense and too sulfur-rich to be injected into the SPR. This crude is highly viscous, resistant to flow, and corrosive. To be useful, it must be diluted with a very light hydrocarbon liquid (naphtha or condensate) and subjected to sulfur removal. Reducing the crude to an acceptable density would require dilution of up to 50%, with desulfurization typically performed via catalytic chemical reactions at high temperatures and pressures. All of this adds significant cost.

There is also a maintenance issue. To respond to emergencies, the SPR was originally designed to withdraw oil rapidly—at a maximum of 4.4 million bbls/d. In practice, releases have never approached this level, with recent large-scale withdrawals kept to 1.0–1.4 million bbls/d over 4-6 months. The GAO suggests this lower rate partly reflects a goal of reducing added wear on the infrastructure and the salt caverns themselves.

The DOE should also document the lessons learned from the 2022 drawdown and the life-extension project, update technical standards that may no longer reflect current conditions, and provide Congress with a realistic estimate of the costs required to keep the reserve operational.

Energy Security Transcends a Simple Barrel Count

Washington’s new Venezuela deal, if it survives, could reduce other imports and thereby make America more energy secure regarding oil. Over the next decade, it could supply significant new production to Gulf Coast refineries configured to process such crude.

However, it will not lower gas and diesel prices anytime soon, nor will it significantly aid in refilling the SPR, which is a confirmed element of U.S. energy security. The 2026 emergency release demonstrated that the reserve can be indispensable during a crisis, preventing fuel prices from reaching stratospheric heights and averting the subsequent fallout.

What the deal does do, however, is draw attention to this reserve and its deteriorating condition. Currently, the United States has been demanding that an aging infrastructure system do more, even as it is maintained in a state of weakening capability.

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