Will The U.S.'s Big New Venezuela Oil Deal End Up A Dry Hole?

Will the US's big new Venezuela oil deal end up a dry hole? Hello, I'm Steve Forbes, and this is What's Ahead, where you'll get the insights you need to better navigate these turbulent times.

With much fanfare, President Trump has announced a deal where the U.S. government, the Pentagon in this case, gets a direct stake in key Venezuelan oil fields.

The President declared on Truth Social, this historic transaction more than doubles American oil reserves, greatly increases our oil supply, and will substantially lower gas prices for all Americans long into the future.

The actual arrangement is unusual.

The Pentagon gets a 35% stake in a company called North American Blue Energy Partners, which is run by a crony of current Venezuelan President Delce Rodriguez.

But don't bank on a future gusher from Venezuela, certainly not as fast as President Trump anticipates.

The reason is that there is no more of an emotional, combustible political mix than nationalism and oil.

Mexico, for example, nationalized 17 foreign oil companies operating in their country back in 1938.

Mexicans regarded the seizure as a declaration of independence.

The date of the nationalization, March 18, is a national holiday.

With similar nationalist fervor, other countries have followed Mexico's example.

In 1953, a pro-communist government in Iran nationalized the country's British-controlled oil industry.

The event precipitated a coup, with fingerprints from the CIA and its British equivalent all over it.

It restored the deposed Shah Mohammad Reza Pahlavi to the peacock throne.

The Islamic terrorists who ousted the Shah in 1979 used this oil incident as one of their justifications for seizing power.

What we have here is the Venezuelan government making a deal with a supposedly independent company where the U.S. stake is less than 50%.

But the political reality is that it's being regarded by political forces in Venezuela and elsewhere as a U.S. takeover, particularly since the Pentagon will have a stake in this entity.

The current unelected president, Rodriguez, heads an unpopular government that is seen as illegitimate.

The previous dictator, Nicolas Maduro, agreed to hold elections back in 2024 as a way to escape American sanctions.

He barred the popular opposition candidate, Maria Corina Machado, from the race, but she endorsed a surrogate who won overwhelmingly.

But Maduro, controlling the military and the police, did the vote counting and blatantly declared himself the winner.

Machado, Venezuela's leading advocate of democracy, had to go into hiding, lest Maduro arrest and kill her.

She was awarded the Nobel Peace Prize, After President Trump arranged the dramatic seizure and arrest of Maduro, who was a major drug kingpin, everyone assumed Machado would return when honest elections were held, which were quickly anticipated.

Instead, the Trump administration dealt with the discredited Rodriguez, who had been Maduro's obedient lackey.

The process to return to democracy, which is being overseen by U.S. officials, has been proceeding at a snail's pace.