Can Trump’s Venezuela Oil Agreement Really Lower U.S. Gas Prices? Experts Weigh In

POLICY WIRE — Washington, D.C. — President Trump announced on Friday that a U.S. agreement with Venezuela to develop its oil reserves is expected to significantly reduce gas prices for Americans in the long term. With the national average gas price remaining above $4 per gallon, many are questioning whether relief is imminent.

However, energy experts advise against immediate expectations. The deal involves the development of 17 strategic oil fields in Venezuela, which hold confirmed reserves of 65 billion barrels of oil, as reported by Venezuelan state media on Saturday. Despite the potential for increased oil supply to the U.S., the process of developing new fields can take up to 15 years post-discovery to start producing oil, according to Global Energy Monitor, a nonprofit organization that monitors energy infrastructure.

This timeline might be optimistic, considering the geopolitical risks and the nature of Venezuela’s heavy crude, which is more challenging to refine into gasoline compared to the light crude typically processed by U.S. refiners. Tracy Shuchart, CEO of commodity analytics firm Hilltower Resource Advisors, suggested on social media that it could take between five to 15 years before Venezuelan oil significantly impacts U.S. gas prices.

Patrick De Haan, a petroleum analyst at GasBuddy, noted in a research note on Monday that the announcement signals the White House’s ongoing concern about high fuel prices. However, he emphasized that any benefits from increased Venezuelan oil production would take years to fully materialize and are unlikely to affect prices in the short term.

Additionally, the U.S.-Venezuela oil venture faces potential legal and operational challenges, making it improbable to increase oil production in the near future, according to analysts from investment bank UBS in an August 31 report. Venezuela holds the world’s largest proven oil reserves, with over 300 billion barrels, compared to the U.S.’s less than 50 billion barrels.

Despite Venezuela’s vast reserves, its oil industry has suffered from years of underinvestment. Experts estimate that at least $100 billion is required to restore its oil fields to full capacity. The country’s oil production increased to about 1.1 million barrels per day in the second quarter of this year, up from 941,000 barrels per day in 2025, according to the latest OPEC data.

Secretary of State Marco Rubio stated on social media on Friday that the project is anticipated to draw nearly $100 billion in private investment to Venezuela and create thousands of jobs. The deal seems to open the door for private sector investment in Venezuela’s oil industry, according to Bob McNally, a former energy adviser in George W. Bush’s administration, who spoke to the Associated Press.

Despite the U.S. intervention in Venezuela in January, Chevron remains the only American oil company actively producing oil in the country. Other major oil companies withdrew years ago after former Venezuelan leader Hugo Chávez nationalized the country’s oil industry. ExxonMobil and ConocoPhillips later won lawsuits for compensation for the expropriation of their assets.

This history might make oil companies cautious about re-entering Venezuela, even under the current agreement, UBS analysts noted. They added that any significant investment in Venezuela would generally require a legal framework that could withstand changes in leadership in both the U.S. and Venezuela. Companies like ExxonMobil and ConocoPhillips are still owed substantial amounts under legal judgments related to assets previously expropriated in Venezuela.

For now, the conflict with Iran is having a more significant impact on gas prices than the agreement with Venezuela. Oil prices increased on Sunday following the U.S. attack on Iranian rocket launchers in the Strait of Hormuz. The price for a barrel of West Texas Intermediate, the U.S. benchmark, rose by $2.42, or 2.9%, to $85.78 a barrel on Monday.

Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, told the Associated Press that the U.S.-Venezuela deal could be beneficial in the long run but is unlikely to affect gasoline prices at retail stations for the Labor Day weekend.

Reporting by Policy-Wire (PW)