Trump's Venezuela Oil Deal Faces Legal Hurdles

President Donald Trump announced an agreement granting the United States control over more than 65 billion barrels of Venezuelan oil at no cost to American taxpayers. The deal's chief negotiators were named as Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Venezuela's acting President Delcy Rodriguez. A White House fact sheet released later offered an account that conflicts with statements from Rodriguez and the Pentagon. While the volume of oil is significant, the financing structure and legal authority underpinning the arrangement are its most contentious elements.

Acting President Delcy Rodriguez described the agreement on state television as a 25-year, bilateral project. It spans 17 strategic fields and eight greenfield blocks, aiming for over 1.5 million barrels of daily production. Rodriguez claimed the deal would draw $100 billion in investment, returning roughly $209 billion to Venezuela at a benchmark price of $65 per barrel, preserving national sovereignty over resources. President Trump, however, claimed majority American ownership of the reserves, which would be illegal under Article 12 of Venezuela's constitution. A U.S. Official told the Associated Press that Washington would control 55% of the output from a new private company called North American Blue Energy Partners (NABEP), with the right to buy crude at cost for the Strategic Petroleum Reserve and the military. The White House later specified this as a 35% equity stake for the Pentagon's Office of Strategic Capital, plus the State Department's right to buy 20% of output at cost. This U.S. Framing appears to conflict with Rodriguez's promise of $19 revenue per barrel for Venezuela if large amounts are sold to the U.S. At cost.

The Pentagon's Office of Strategic Capital is cited as a potential overseer and funder for the oilfield licenses. However, its legal authority is limited. Congress codified the office to extend loans and guarantees for dual-use technologies across 34 specific categories. Financing foreign upstream oil development is not one of them. The office made its first direct loan in August 2025. Pentagon spokesman Sean Parnell stated the office cannot take an ownership stake in private companies, contradicting the 35% equity claim in the White House fact sheet. This mismatch creates several problems. The claim of 'no cost to the American Taxpayer' relies on loan guarantees that would only incur cost in the event of a default. Francisco Monaldi of Rice University told the Post that oil companies remain hesitant, and ExxonMobil's chief executive called Venezuela 'uninvestable' in January. The White House fact sheet now puts the lease at 100 years, two days after Rodriguez described a 25-year term. The Pentagon office's pilot authority expires on October 1, 2028, meaning the financing instrument could sunset long before any lease, with no plan for a replacement. As the Congressional Research Service notes, information about the Pentagon's loans and guarantees need not be made public. This lack of transparency surrounds the largest resource claim in the hemisphere.

Venezuelan law presents a separate set of obstacles. Article 12 of the constitution makes hydrocarbon deposits the inalienable property of the state. Article 302 reserves the petroleum industry to the state, and Article 303 requires the state to hold all shares of the state oil company PDVSA. A January hydrocarbons reform loosened joint venture rules but did not authorize a 55% foreign ownership stake. Ricardo Hausmann, a former Venezuelan planning minister, wrote that Rodriguez 'has no legitimacy or constitutional power to commit Venezuela to any such deal.' He argued no major American oil company would treat it seriously because it will not last. Ratification would require a legislature, likely the 2025 National Assembly led by Delcy Rodriguez's brother, Jorge. That body's constitutional legitimacy is itself unsettled.

Opposition to the deal surfaced immediately across Venezuela's political spectrum. Protests occurred in Caracas, with opposition figures calling it a betrayal and Chavista hardliners attacking Rodriguez for conceding resources the movement long defended. The deal's principal intermediary in Caracas is Alejandro Betancourt, who controls NABEP. Swiss prosecutors have sought to arrest Betancourt on suspicion of financial crimes, allegations his attorney denies. The White House states the U.S. Would have veto power over the NABEP board and that its agreement with the company is governed by U.S. Law. Venezuela has a precedent for such disputes. In 2007, when the government converted Orinoco projects into joint ventures, ConocoPhillips and ExxonMobil rejected the terms and were expropriated. Both companies eventually won large arbitration awards-Conoco secured roughly $10.7 billion and Exxon collected $907 million-but enforcement has been slow and mostly fruitless. Any company holding a repudiated contract in these fields would win an uncollectable judgment. A U.S. Federal guarantee would shift this risk onto the Treasury. The ultimate holder of risk under the instrument chosen by the Trump administration is the U.S. Treasury.