- Diesel prices have reached an all-time high, with truckers paying as much as $5.85 a gallon, coinciding with the announcement of the oil deal.
- On August 28, President Donald Trump announced what he called the 'biggest oil deal in history', securing 65 billion barrels of Venezuelan oil through North American Blue Energy Partners (NABEP).
- The White House fact sheet revealed that NABEP will have 100-year concessions, a 35% Pentagon stake, and a 20% State Department offtake at cost.
- China's previous purchase of 80% of Venezuela's oil exports appears to be over as the U.S. opens up as a new market for this oil.
- Venezuela's oil production peaked at 3.5 million barrels a day in the late 1990s, but by mid-2020, US imports from Venezuela fell to zero for 43 months.
- In January, ExxonMobil CEO Darren Woods stated that Venezuela was uninvestable without legal reforms, leading Exxon to remain on the sidelines.
Diesel prices have reached unprecedented levels, with truckers facing costs as high as $5.85 per gallon. This surge coincides with the U.S. government's announcement of a 35% stake in North American Blue Energy Partners (NABEP), which holds rights to 65 billion barrels of Venezuelan oil.1234
The deal, described by President Trump as the 'biggest oil deal in history', aims to revitalize Venezuela's oil production, which has plummeted from a peak of 3.5 million barrels per day in the late 1990s to just 1.2 million barrels currently. The Pentagon's investment is part of a broader strategy to shift Venezuelan oil exports from China to the U.S.
NABEP plans to invest up to $100 billion to increase production, while the U.S. will secure 20% of production at cost and maintain veto power over board appointments. This move is seen as a strategic displacement of competitors in the energy sector, with the potential for $200 billion in royalties and taxes over 25 years.
Despite the optimism surrounding the deal, experts warn that restoring production to 3 million barrels per day could require $183 billion in capital over 15 years, far exceeding NABEP's current commitments.
“The deal gives NABEP 100-year concessions on 17 oilfields, with a 20% State Department offtake at cost and a veto over board appointments. China, which bought 80% of Venezuela's exports, now faces displacement, while US refiners run at 96% utilization amid record diesel prices.”
South China Morning Post
