President Donald Trump promised that his massive oil deal with Venezuela would "substantially lower gas prices for all Americans, long into the future." However, Venezuela’s oil infrastructure is in a state of disrepair after years of mismanagement by its socialist government. Experts say it will take years and huge investments to boost the South American nation's oil output.
Trump announced Friday that the U.S. secured majority control over 65 billion barrels of Venezuela's proven oil reserves, around 20% of the 303 billion barrels that the South American nation is thought to possess. But huge investments are needed to extract those reserves, and the legality and long-term viability of the agreement with Caracas are also uncertain.
U.S. drivers were paying $4.08 per gallon on average nationwide Monday, nearly 30% higher than this time last year. Prices are rising due to Ukraine's attacks on Russian refineries and the supply disruption in the Middle East triggered by the Iran war.
Venezuelan oil exports won't provide any near-term relief to U.S. drivers. The country is currently producing around 1.2 million barrels a day, down from a peak of 3.5 million bpd in the late 1990s.
Experts note that Venezuela's oil infrastructure needs to be improved to allow for increased production, which could take 5 to 7 years.
