Venezuela is considering withdrawing from the Organization of the Petroleum Exporting Countries as it negotiates a long-term energy agreement with the United States. Discussions between American and Venezuelan officials include a proposed 100-year lease of several Venezuelan oil fields, according to sources cited by Bloomberg.
While possible withdrawal from the oil cartel has been discussed with Washington, sources told the news agency that no final decision has been made. The negotiations mark a significant shift in diplomatic and economic alignment between the two nations.
The proposed deal involves 17 oil fields across two major producing regions, according to details reported by Reuters. The negotiations encompass undeveloped blocks in the Orinoco belt as well as active producing fields in the Lake Maracaibo region.
Some of the fields under negotiation are currently operated by a small Chinese firm under a contract signed during the presidency of Nicolas Maduro. Mr Maduro was later captured and removed to the United States.
A source familiar with the talks stated that discussions regarding the lease are real and are taking place at the highest levels of both governments. The agreement would grant Washington extended access to South American energy supplies.
Potential impact on American crude reserves
News outlet Axios reported that the prospective deal could more than double proven United States oil reserves. Venezuela possesses the largest proven crude oil reserves in the world, holding extensive deposits of heavy crude.
An American official described the scale of the proposed arrangement as colossal, telling Axios that calling the deal huge would be an understatement. Securing access to Venezuelan fields would significantly expand United States energy assets in the Western Hemisphere.
Bloomberg noted that acquiring direct rights to foreign oil reserves would represent an almost unprecedented intervention by the United States in another nation's domestic economy. The initiative aligns with the so-called Donrow doctrine promoted by President Donald Trump to expand American strategic influence across the Americas.
President Trump previously declared that the United States controls Venezuelan oil resources and publicly referred to Venezuela as the 51st American state.
Declining Venezuelan output and OPEC influence
Venezuela was one of five founding nations that established OPEC in 1960 to coordinate global petroleum production and pricing policies. However, years of United States economic sanctions and internal political instability severely damaged the country's oil production infrastructure.
Data from a Bloomberg survey indicated that Venezuela produced 1.16 million barrels of crude oil per day in July. That volume represents less than half of what the country produced a decade ago, despite production showing some recovery earlier this year.
A Venezuelan exit from the group would heighten existing uncertainties surrounding OPEC's ability to regulate global crude prices. United Arab Emirates withdrew from OPEC in May, and Iraq threatened to leave the cartel in June.
Some United States officials believe an energy alliance between Washington and Caracas would establish an oil superpower capable of weakening OPEC's market dominance. Exempting Venezuelan production from cartel quotas could allow the country to increase long-term supply and reduce global oil prices.
Current trade and financial flows
Crude oil exports between Venezuela and the United States have already expanded significantly in recent months. Roughly half of all oil produced in Venezuela is currently exported to the United States market.
United States Deputy Secretary of Energy Kyle Haustwait characterized the expanding trade volume between the two nations as a great partnership.
The Financial Times reported in July that the United States administration had collected more than $13 billion in revenue this year from sales of Venezuelan crude. However, federal authorities have disclosed minimal information regarding how those funds are being allocated.
