#美委达成千亿级石油合作 How significant is the 25-year US-Venezuela oil agreement?

What China wanted to do, Trump did for it.
Trump has negotiated an oil contract with Venezuela—and it is a contract that divides global oil pricing power. Trump is going for OPEC’s jugular.
Venezuelan Acting President Delcy Rodríguez has confirmed that Venezuela and the United States signed a 25-year energy agreement covering 17 strategic oil fields, with the goal of raising Venezuela’s oil production to more than 1.5 million barrels per day, compared with less than 1 million barrels currently. In addition, eight entirely new oil zones in the Orinoco Oil Belt are awaiting development.
Trump claimed that through partnerships with private capital, the United States will gain majority control over 65 billion barrels in proven reserves.
What does 65 billion barrels mean? Data from the U.S. Energy Information Administration shows that Venezuela has approximately 303 billion barrels in proven oil reserves, the largest amount in the world. The resources targeted by the United States this time are equivalent to 21.5% of Venezuela’s total reserves. If produced at 1.5 million barrels per day, 65 billion barrels could theoretically last for approximately 119 years. Therefore, the real value of the 25-year agreement is not merely the immediate 1.5 million barrels, but the extremely long-term bargaining power over oil prices that Trump has secured for the United States.

Trump recently said he wants to drive oil prices lower and compete with OPEC for control over oil prices.
The United States is hardly planning to spend government money on development. Secretary of State Marco Rubio provided a figure: nearly $100 billion in future private investment. Chevron is expanding related projects, and is also involved in exploration, investment, drilling technology, and oilfield services for eight blocks in the Orinoco region. Everything will be handled by U.S. private companies, in exchange for long-term control over oil prices and supply.

Some people ask what Venezuela will get after giving up so much, and why it would agree to U.S. control of its oil.
Rodríguez calculated that at $65 per barrel, Venezuela’s government revenue over 25 years would be approximately $209.34B, with an average of about $19 per barrel going to the Venezuelan government. The new projects have a minimum royalty of 16% and a corporate income tax rate of 34%; this refers to government revenue, not $209.3 billion in net profit. Trump does not want to earn the difference between $19 and $65 per barrel—he wants the United States to control global oil prices.
The world has suffered under OPEC for a long time. Trump wants global oil prices to fall. China has long been affected by OPEC’s control over oil prices and supply, and also bears the risk of oil-price fluctuations. In July this year, Venezuela exported 1.16 million barrels of oil per day, of which the United States took 786k barrels; in January, during Maduro’s tenure, the figure was 284k barrels. The United States is now absorbing large quantities of Venezuelan oil. It dares to challenge Canada despite poor relations because the United States has long depended on Canadian heavy crude, whose quality is very similar to Venezuelan heavy crude. Canada deliberately built a pipeline toward the Pacific to sell oil to Asia, mainly China, Japan, and South Korea. So there is no need to worry about whether Venezuelan oil can be purchased: as Trump moves closer to Venezuela, Canadian oil will naturally flow toward Asian markets, leaving heavy crude unaffected. But U.S. light crude and condensate, like Iranian oil, are highly suitable for refining blends with Venezuelan heavy crude. This is why Trump dares to confront Canada and target Venezuela.
Global oil supply is approximately 101.5 million barrels per day. When Venezuelan projects eventually reach 1.5 million barrels per day, that will equal 1.48% of global supply. Oil prices are precisely determined by the final 1% to 2% of marginal supply.
Some people ask whether oil prices will plunge now.
No. This is a long-term contract, and many of the oil fields have not yet been developed, so there will be no short-term impact. If Venezuela’s daily production increases by 500k to 800k barrels over the next two or three years, and the Strait of Hormuz remains normal, Brent crude could decline substantially over the long term.
In a more extreme scenario, all 1.5 million barrels of Venezuelan oil would become new global supply, and Venezuela could withdraw from OPEC under U.S. pressure and no longer be subject to production quotas. Oil prices could undergo a structural change. OPEC’s share of global production has already fallen to just 40%. China’s strategic stockpiling creates purchasing flexibility, and Venezuelan production growth and withdrawal from OPEC would have an enormous impact on OPEC. $XTIUSD