Biggest oil deal in history?

You'd think the weekend's biggest Venezuela news might've been ousted dictator Nicolás Maduro dropping some fresh jailhouse pics in his signature grey tracksuit, flashing double peace signs as his Manhattan trial creeps closer.

But never one to cede the front page, President Trump instead went ahead and announced "the biggest oil deal in world history":

In a nutshell, DC and Caracas say they're now launching a new joint venture covering 17 major oil fields in Venezuela, with the US controlling a claimed 55% (35% equity + 20% of output at cost).

The reported deal runs for a century, and covers a fifth of Venezuela's vast reserves — aka more than America's own entire proven book.

Why this deal?

Trump argues it’ll deliver cheaper pump prices and a replenished US strategic petroleum reserve (SPR), without spending a single taxpayer cent.

And Venezuela's Delcy Rodriguez argues the deal will attract $100B in capital to revive her country's decrepit oil infrastructure, then another $209B in state revenues "at the service of national development" once that extra oil starts flowing.

So... sounds like a win-win. Where's the but?

First, the details are thinner than a jailed ex-dictator: while Trump says the deal will run for a century, Delcy just went on national TV to insist it’s only for 25 years.

Plus Trump insists he's not using taxpayer cash, while Delcy insists there's now $100B en route. So... who's actually paying to rebuild Venezuela's equipment?

The idea seems to be that, under the umbrella of US guarantees, it'll now be easier for everyone to mobilise the necessary capital. But that takes us to...

Second, who's actually involved from the US? Intriguingly, the Pentagon's Office of Strategic Capital (OSC) is in the mix: that’s the Biden-era shop meant to step in where market failures leave US supply chains exposed (eg, to China's state-backed dominance of critical mineral processing).

So the OSC's presence here seems to implicitly acknowledge that, for all the DC bluster, US oil majors still see Venezuela as un-investible. And the OSC’s natsec angle is the right to buy the extra crude at cost, both for a) those depleted SPR caves down on the Gulf, and b) US military uses.

Third, as for the deal’s lead in Venezuela? It's not a government agency, nor even Venezuela's state-owned oil giant PDVSA. Rather, it's a 46-year-old guy called Alejandro Betancourt López — he's a classic bolichico (Bolivarian kid), which is local slang for young tycoons who got rich off Chavez-era state contracts.

Young Ale’ controls NABEP, which is Venezuela's second-largest private producer after Chevron. And he seems to have landed this plum deal because...
a) his NABEP has a record of scaling output (with US partners) when others won’t
b) he's a rare insider willing to work with both Caracas and DC, and...
c) US pressure seems to have eased Swiss and Spanish probes into his alleged money-laundering (which he denies, though both probes are still live).

Then fourth, the whole thing has triggered legit political backlash: old school Chavistas are outraged at what they see as a betrayal to US imperialism, with mock posts already dubbing her new joint venture 'PDUSA' (a pun on the state-owned PDVSA). Maybe they’re also a tad jelly that someone else now gets the plundering?

Meanwhile, pro-democracy opposition figures somehow now agree with their old Chavista foes because, absent a credible election or legislative scrutiny, Delcy has zero real authority to now be handing the Americans a century-long oil deal.

And the highest-profile opposition figure of them all — Nobel laureate Maria Machado — seems stuck in silence, perhaps because she's just spent the last year pitching US investors on Venezuela’s pro-business future, only to see free-market auctions get swapped out for a murky middle-man in bed with pragmatic Chavistas.

Or perhaps it’s because Machado sees no democratic future for Venezuela without US backing for credible elections, and yet this oil deal seemingly gives the US a big reason to just extend the unelected status quo rather than roll the dice on some future leader (like her) who'd be highly likely to just hit ctrl-z on this entire deal.

Sound even smarter:

• America’s SPR is now at around 41% capacity, near 1980s lows.

• Venezuela is reportedly considering exiting OPEC, in a possible two-fer for DC: the above deal (theoretically) expands US supply, while Venezuela’s departure from OPEC would further weaken the price-setter (which Venezuela co-founded).