Reality check: Trump's Venezuela oil deal may have little immediate impact on US gas prices
Trump will meet with oil refiners and distributors at the White House Tuesday.
President Donald Trump announced the United States reached a deal to extract tens of billions of barrels of Venezuelan crude to replenish America's depleting strategic oil reserves and lower prices as Americans face crushing energy costs at home with the Iran war dragging into its seventh month. But experts say it won't provide immediate relief for Americans at the pump and will take years for the oil to be captured.
"It's not going to result in cheaper gasoline, diesel or jet fuel prices over the next five days, five weeks or five months. It's just not," Tom Kloza, the chief energy adviser for the oil company, Gulf Oil said in an interview. "It could have some impact, but it's probably four or five years down the road."
The impact is not expected immediately, according to analysts, because the oil tapped in Venezuela is thicker than what most refineries are accustomed to processing, and it would take years to build the infrastructure needed to ramp up oil production.
The average price of a gallon of regular gas is $4.03, according to GasBuddy -- up more than $1 from the start of the Iran war. Trump is set to meet with oil refiners and distributors Tuesday at the White House to push them to grow America's refining capacity to lower gas prices, a White House official confirmed to ABC News.
Vice President JD Vance argued Monday that the U.S. is already seeing a "significant increase in oil production out of Venezuela," but did not offer specifics on when this deal would bear fruit.
The agreement, struck with Venezuela's unelected leadership, would give the U.S. a stake in Venezuela's vast oil reserves by allowing the U.S. government and an unnamed private operator license to drill into untapped oil fields for the next 100 years, Trump said.
Announced Friday, the deal gives the U.S. 55% effective output of the new private company, including an ownership stake and rights to buy oil at cost. American purchases of the oil will go toward the U.S. strategic oil reserves along with the military, according to a U.S. official.
Trump is set to meet with oil refiners and distributors Tuesday at the White House to push them to grow America's refining capacity to lower gas prices, a White House official confirmed to ABC News.
The average price of a gallon of regular gas is $4.03, according to GasBuddy -- up more than $1 from the start of the Iran war.
How US, Venezuela are working together
Trump touted that the deal, which he said was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Venezuelan interim president Delcy Rodríguez, comes "at no cost to" U.S. taxpayers.
Trump's deal arrives eight months after the U.S. raided Venezuela and captured then-President Nicolas Maduro and his wife Celia Flores. At the time, Trump said the U.S. would be "very strongly involved" in Venezuelan oil.
The U.S. quickly backed Rodríguez, Maduro's vice president, as interim leader over the recognized opposition leader because, as Trump put it in January, "she's essentially willing to do what we think is necessary to make Venezuela great."
Rodríguez said Saturday the "very simple" agreement would see her country offer its "oil, its industry and the experience of its workers" in exchange for the U.S. contributing "the capital and technology needed to restore and develop those assets."
"In return, Venezuela receives production, jobs, investment in infrastructure, increased revenue for the state, and productive linkages for the national industry," Rodríguez said in recorded remarks defending the deal to her country. "The benefits are impossible to overlook."
In another statement, Rodríguez said the deal with the U.S. involves the development of 17 fields with a proven potential of 65 billion barrels. The statement said the agreement could draw $100 billion in investment into Venezuela's oil industry and yield over $209 billion in taxes for Caracas.
It's still unclear how the oil reserves would be drilled, when the drilling would begin, who is paying for this joint venture, or what security guarantees the U.S. is offering companies. No text of any agreement has been released. ABC News asked the White House for details of the agreement.
Last month, top officials from the State and Defense departments met with their counterparts in Caracas to hammer out details of the oil deal. Earlier this year, Secretary of Energy Chris Wright traveled to Caracas in February for a firsthand assessment of the country's oil industry, including tours of the oil industry's infrastructure.
Wright is expected to lead a high-level delegation to Caracas this week to advance the bilateral oil agreement, according to a U.S. official.
The Energy Department has been actively working with interim Venezuelan authorities and the private industry to oversee an overhaul of Venezuela's energy sector and to market Venezuelan crude oil in the global marketplace.
Difficulties ahead with Trump's plan?
Experts say the development and production of Venezuela's crude oil will take time, and notably, the U.S. energy companies likely needed to do the job have largely remained silent since Trump's announcement.
"While the hope of lower gas prices sounds promising, it still will take billions [of dollars] of investment to get that oil," said Patrick De Haan, head of petroleum analysis at GasBuddy.
He added that the 65 billion barrels Trump mentioned is only what geologists say "may" be in Venezuela.
Kloza said Venezuelan oil has an added burden compared to oil the U.S. gets from elsewhere because it is "very viscous and thick" and therefore "very difficult to bring to the ground."
Days after the January Maduro raid, Trump gathered oil executives at the White House to sell them on investing resources in Venezuela, but some executives were skeptical.
"We first got into Venezuela back in the 1940s. We've had our assets seized there twice, and so you can imagine, to reenter a third time would require some pretty significant changes from what we've historically seen here and what is currently the state," Exxon CEO Darren Woods said then.
"If we look at the legal and commercial constructs and frameworks in place today, in Venezuela today, it's un-investable, and so significant changes have to be made to those commercial frameworks, the legal system," Woods added.
ABC's Devin Garbitt contributed to this report.