A private oil company has struck a deal with the Trump administration to develop 17 areas in Venezuela, an effort that experts say will take years and billions of dollars.
The U.S. energy giant, which stayed in the country after other Western companies left, will invest $7 billion in the country to more than double its production there.
Venezuela is believed to have one of the world’s largest reserves of oil but it produces very little oil because of mismanagement, corruption and U.S. sanctions.
The president said an agreement between the countries covered more than 65 billion barrels of reserves. A U.S. official said it would involve a partnership with a private company.
An oil refinery in Punto Fijo, Venezuela, in 2021. Venezuela’s president, Delcy Rodríguez, said a U.S. oil deal would have a “significant impact on our nation’s revival.”
Oil companies and governments are consuming their once vast stockpiles as Iran and the United States continue to struggle for control over the Strait of Hormuz.
A Chevron-chartered oil tanker was anchored near Maracaibo, Venezuela, in February. Chevron is the only U.S. oil company with a major footprint in the country.
Attacks in the Strait of Hormuz during the Iran war have led Saudi Arabia to rely on an alternative route for exporting oil. Our reporter Rebecca F. Elliott explains how that route is now threatened by the Houthis, a Yemeni militia supported by Iran.
Saudi Arabia has diverted huge amounts of oil to the Red Sea since the Iran war began, but now the Iranian-backed Houthi militants say that they intend to block that route.
For decades, OPEC influenced the market by how much oil it produced. But China, the largest importer, is demonstrating its remarkable power over prices.
Smaller U.S. oil producers are starting to drill more wells, but big companies like Exxon Mobil and Chevron have said they are not changing their plans as a result of the war with Iran.
The preliminary U.S.-Iran deal temporarily waives restrictions that have limited the country’s oil sales and how much money it has been able to make from those exports.
Some analysts said the main international oil price, which was up 6 percent on Monday, could climb much higher in the coming weeks if the Strait of Hormuz doesn’t reopen.
An oil refinery in Carson, Calif. The possibility of continued fighting has raised concerns about how long the world’s stockpiles of oil and fuels will last if the Strait of Hormuz does not reopen.
Login
