President Donald Trump’s unprecedented oil deal with Venezuela, of which the full details have yet to be made public, is already destined to “backfire” in a spectacular fashion, academic and economic expert Francisco Rodríguez argued on Saturday.
“There is still a lot we don’t know about the deal,” Rodríguez wrote in a guest essay published Saturday in The New York Times. “Mr. Trump claims that it will come at no cost to American taxpayers and that it will serve to replenish the U.S. Strategic Petroleum Reserve, which is running at its lowest level since 1982.”
Announced last week, the deal will see the United States be granted rights to Venezuela’s untapped oil fields for 100 years, with the U.S. government taking a direct stake in Venezuela's oil reserves — the single-largest proven oil reserves on earth — through a partnership with a private company run by controversial oil baron Alejandro Betancourt López.
The deal, however, will likely fail to meet any of the Trump administration’s stated objectives, Rodríguez argued.
“This is a country where no one should be surprised to see privatization fail. Nor is this deal likely to make a dent in global oil prices, which the Trump administration has presented as one of the key goals of the plan,” Rodríguez wrote.
“It will take years for Venezuelan oil production to increase in a significant way — and even if it does, it will not keep pace with the projected growth in world demand over the next 25 years. Any oil that ends up in the Strategic Petroleum Reserve will not be sold in global markets.”
The Trump administration has also claimed that the oil deal would help with Venezuela’s “democratic transition.” This goal too, Rodríguez argued, was destined to fail.
“Over the past two decades, Venezuelans have lived through the destruction of what was once a prosperous economy and a vibrant democracy. The United States now has both the opportunity and the responsibility to help them rebuild their country,” Rodríguez wrote.
“A hazy privatization process that reduces accountability, deepens inequalities and sidesteps institutional reform will not bring democratic change closer. It will push it further away.”