US-Venezuela oil deal: US President Donald Trump has announced a major oil agreement with Venezuela, claiming that the United States will gain majority control of more than 65 billion barrels of proven Venezuelan oil reserves.

Trump described the agreement as the “biggest oil deal in world history” and said it was reached through a partnership involving private businesses. He also said the deal would come at no cost to American taxpayers.

According to Trump, the agreement could significantly increase the US oil supply and eventually help bring down gasoline prices for American consumers.

Trump says deal will boost US oil reserves

In his announcement, Trump said the agreement would more than double America's oil reserves and strengthen the country's energy position.

He also linked the deal to Venezuela's economic recovery, saying greater investment in the country's oil industry could help put its economy on a stronger footing.

However, several details of the arrangement, including the exact fields covered and how the new ownership structure will operate, have not yet been fully disclosed.

Nearly $100 billion investment expected

US Secretary of State Marco Rubio said the agreement is expected to bring nearly $100 billion in private investment into Venezuela.

Venezuelan interim President Delcy Rodriguez said the plan involves developing 17 strategic oil fields. Venezuelan authorities have also projected substantial tax revenue for the country as production increases.

The proposed investment is aimed at rebuilding Venezuela's badly weakened oil sector and increasing production from fields that have suffered from years of underinvestment and ageing infrastructure.

Why Venezuela's oil reserves matter

Venezuela has some of the world's largest proven crude oil reserves, estimated at more than 300 billion barrels. Despite its huge resource base, the country's oil production has remained far below its potential because of ageing infrastructure, years of underinvestment and political and economic instability.

The new agreement is therefore being viewed as a major attempt to revive Venezuela's energy industry and bring more of its crude back into global markets.

Deal comes amid US fuel price pressure

The announcement comes at a time when the Trump administration is facing pressure over fuel prices in the United States.

Trump has repeatedly argued that increasing oil supplies would help reduce gasoline costs. The Venezuela agreement could provide American companies with greater access to Venezuelan crude, although any major increase in production is unlikely to happen immediately because the country's oil infrastructure needs significant investment and repairs.

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The agreement marks another major development in relations between Washington and Caracas following the removal of former Venezuelan leader Nicolás Maduro earlier this year.

Trump had earlier backed the return of US oil companies to Venezuela and argued that American interests were affected after the nationalisation of foreign-owned assets under former Venezuelan President Hugo Chavez.

The latest agreement could now give US businesses a much larger role in Venezuela's oil industry, while Caracas hopes the investment will generate jobs, government revenue and economic growth.