To The Moon

US President Donald Trump has unveiled a major oil agreement with Venezuela, a move that comes as crude supply faces sustained pressure amid the ongoing US-Iran conflict. According to reports, Trump stated on social media on the evening of the 28th that Washington and Caracas have reached a petroleum-related deal, granting the US "majority control" over more than 650 billion barrels of Venezuela's proven oil reserves.

Trump labeled the pact the "largest oil deal in world history," emphasizing that it comes at "zero cost" to US taxpayers. He noted that the transaction was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, and Venezuelan interim president Delcy Rodriguez, with the US also leveraging "partnerships" with several unidentified private enterprises to finalize the agreement.

While WTI crude posted a weekly decline of 4% over the past week, marking the first losing week in nearly three, oil prices have still surged more than 24% since the outbreak of the US-Iran war.

Where this deal fits

The agreement arrives against a backdrop of mounting pressure on US energy supplies. The US-Iran conflict has severely impeded crude shipments through the Strait of Hormuz, a chokepoint that previously carried roughly 20% of global petroleum trade flow. Daily vessel transits through the strait have now plummeted from about 100 ships a year ago to just a handful.

Meanwhile, US strategic petroleum reserves remain critically strained. Data released earlier this month by the US Department of Energy showed reserves had fallen below 300 million barrels, down more than 100 million barrels since the start of 2026, touching levels not seen since the 1980s. Trump asserted that the newly acquired control over 650 billion barrels would more than double the size of US oil reserves.

On the retail front, AAA data shows the average US price for regular gasoline rose to approximately $4.09 per gallon on the 28th, marking a 27% year-over-year increase. With midterm elections approaching, Trump faces urgent political pressure to bring energy prices down, as the outcome will determine whether Republicans can sustain unified control in Washington. Trump indicated that the Venezuela deal should help push oil prices lower.