Controversy Surrounds US-Venezuela Oil Field Development Agreement

To develop 17 Venezuelan oil fields, the US put a Venezuelan private oil development company forward, but secured the right to appoint a majority of the company's directors. Furthermore, it holds veto power over the appointment of the remaining directors, will purchase 20% of the crude oil produced at full cost, and has secured pre-emptive rights for the remaining 80%.

Analysts suggest that while the development is nominally through a Venezuelan company, it is effectively controlled by a US company.

President Trump claimed that this deal would incur no cost to US taxpayers. However, it has been confirmed that the US Department of Defense invested in the equity of these oil fields, suggesting that the claim of zero cost to taxpayers is exaggerated.

The US plans to use the crude oil produced from these fields for its strategic petroleum reserves.

She also stated that through this agreement, she expects to attract $100 billion in investment and generate $20 billion in tax revenue.

However, with the contract not yet public, Trump's claim of 100 years and Delcy Rodríguez's claim of 25 years contradict each other, leaving the actual development period uncertain.

Venezuela has pursued an oil industry nationalization policy through its state-owned oil company since the presidencies of Hugo Chávez and Nicolás Maduro. This led to the effective expulsion of major oil companies, including those from the US, and some argue it hindered the development of the oil industry.

However, criticism is now arising within Venezuela that this agreement, despite involving a Venezuelan company in name, effectively transfers the oil fields to the US, leading to constitutional violation concerns.

The US is already a country with high domestic oil production. Current rises in US oil prices are largely influenced by international oil price increases, leading to skepticism about whether Venezuelan oil field development will directly impact US oil prices in the short term.

Analysis suggests that unless international oil prices fall, it will be difficult for US oil prices to decrease, even if Venezuelan oil is supplied for 100 years.

If, as the US claims, 17 Venezuelan oil fields with the world's largest reserves are put into operation, it could introduce a new source of supply to the global oil market. Similar to how new apartment supply affects housing prices, this could lead to oil price stabilization due to increased supply in the long term.

A continuous supply of new oil to the global market could increase overall supply, potentially contributing to a decrease in international oil prices.

Currently, Venezuelan oil field facilities are difficult to operate due to a long period of investment halts and aging infrastructure. Experts estimate that it will take at least 3 to 5 years to reactivate the oil fields, and significantly increasing production in the short term is considered difficult.

The common skeptical view among experts is that normalizing oil field operations in just a few months is realistically challenging.

This analysis considers the time required for oil field reactivation and the process of expanding production.

Therefore, it seems unlikely that the development of Venezuelan oil fields will contribute to short-term oil price stability.

This is because if oil produced in the US is lower than international prices, it will lead to exports and ultimately align with international prices.

Therefore, analysis suggests it will be difficult to independently lower domestic gasoline and diesel prices solely through increased US supply.

This decline in production is a result of a combination of Venezuela's deteriorating economic situation and the aging of its oil industry facilities.

In contrast, most crude oil produced in the US is light crude.

Therefore, if Venezuelan heavy crude is imported into the US, it could improve diesel production efficiency within the US, potentially having a positive impact on diesel prices.

This is more than a 50% decrease compared to 2019.

The development of Venezuelan oil fields appears to be part of the US's intention to replenish its depleted strategic reserves and secure stable energy security.

The national average gasoline price exceeding $4 per gallon in August is a highly unusual phenomenon. Gasoline prices typically have not been this high during the summer.

The Trump administration, facing the November midterm elections, felt pressured by this high oil price situation, as it could burden voters and negatively impact the election. Thus, urgent measures to stabilize oil prices were needed.

Through the agreement to develop 17 Venezuelan oil fields, the US is pursuing a strategy to exclude existing Chinese and Russian investors. This is part of the US national security strategy, an extension of the 'Donrotrin' strategy to establish undisputed dominance in the Americas.

Since four Chinese companies and one Russian company were already involved in 17 of the planned development sites, this US action is expected to block these countries' entry into the South American energy market.

The US intends to reduce the influence of China and Russia in the Western Hemisphere and strengthen its own dominance.

China stated that this US action violates international law and existing contractual principles.

This is considered an act that disregards China's existing investments and rights, and China has stated its official position that it cannot accept this.

With this US action, Chinese companies are facing the risk of being effectively excluded from these investment opportunities, leading to anticipated massive economic losses.

From China's perspective, they are in a very unfortunate position, facing the potential collapse of their large-scale existing investments.

This increase in supply could influence international prices, opening up the possibility of downward stabilization for gasoline and diesel prices.

Experts predict that, from a long-term perspective, the development of Venezuelan oil fields will contribute to the stability of supply and demand in the international energy market.

The US's method of securing oil fields after arresting another country's president is drawing criticism from the international community. Concerns are rising that such actions could set a dangerous precedent, implying that powerful nations can forcibly exploit the resources of other countries.

This is seen as a violation of international order and the principle of sovereign respect, suggesting the possibility of similar conflicts in the future.