Vice-President J.D. Vance on 4 September announced that the United States is pursuing an arrangement with Venezuela to develop what he described as an effective 65-billion-barrel oil reserve, with American companies leading production and US taxpayers receiving a direct share of royalties. The disclosure, made at a White House press briefing, marks one of the most significant energy diplomacy moves of the current administration.

What the Deal Entails

Under the proposed arrangement, private American firms would enter Venezuela to develop its vast crude reserves, generating oil revenue that Vance said would benefit both Venezuelan citizens and US consumers. A portion of the royalties would flow directly to American taxpayers, according to Vance.

'We’re using, of course, that successful Venezuela operation and some of the friendships and some of the relationships that have developed in the wake of that operation, to create what is effectively a new 65 billion barrel of oil reserve for the United States of America,' Vance told reporters.

Who Negotiated the Agreement

Vance credited Secretary of State Marco Rubio, Defence Secretary Pete Hegseth, and other administration officials with brokering the deal. He framed the outcome as a direct consequence of diplomatic groundwork laid by the current administration's Venezuela policy.

'Thanks to the deal struck by Marco and Pete Hegseth and others in the administration, it actually sets us up to where the American people will directly receive some of the royalties as well,' he said.

The Energy Security Argument

Vance presented the agreement as a strategic response to global supply disruptions, citing Iranian attacks on commercial shipping as evidence that dependable energy sources are a national security imperative. He argued that expanded Venezuelan output would increase global oil supply, exerting downward pressure on fuel costs for American consumers.

'Obviously, that’s going to mean world oil markets get only more supply that will lower costs for Americans,' he said, adding that significant revenue would also reach the Venezuelan people.

Contrast With Biden-Era Reserve Policy

The Vice-President drew a pointed contrast with the previous administration’s handling of the US Strategic Petroleum Reserve, accusing the Biden administration of releasing stockpiles ahead of mid-term elections rather than in response to a genuine international emergency. He said those drawdowns left the reserve 'extraordinarily low.'

Venezuela’s Oil Potential and Its Constraints

Venezuela holds some of the world’s largest proven crude reserves. However, decades of underinvestment, deteriorating infrastructure, political instability, and US sanctions have severely curtailed actual production. Any meaningful ramp-up would require substantial capital inflows and, reportedly, a recalibration of the existing sanctions framework — details the administration has not yet made public. How quickly production could scale, and under what legal structure, remain open questions as of the briefing.