How will the US-Venezuela oil deal work? Alejandro Betancourt, China and Trump’s 65 bn barrel bet | All you need to know

Donald Trump's oil arrangement in Venezuela will prove the US a direct stake in the country’s vast crude resources while reshaping the arrangements around who controls the revenues generated from them.

A deal involves a new Venezuelan oil venture covering 17 fields with around 65 billion barrels of proven reserves. The US government will hold a 35% stake in the company and it will also have the right to buy 20% of its production at cost.

The arrangement gives US buyers access to Venezuelan crude, but without paying a market-based premium.

Alejandro Betancourt controversy

One of the most controversial aspects is the involvement of Alejandro Betancourt, Venezuelan businessman who heads the country’s second-largest private oil company – North American Blue Energy Partners (NABEP), Betancourt has previously accused of involvement in a corruption scheme at Venezuela's state-run PDVSA oil company.

The Trump administration has nevertheless defended his role. a US official said Betancourt was a "proven operator," while acknowledging that geopolitics sometimes involved dealing with "imperfect" characters.

"I'm not nominating anyone for sainthood here. What I am telling you is that this is a person that, in the past, has been helpful to the United States government," the official added.

The China arrangement

This arrangement is also part US's broader effort to control Venezuela’s economic relationships with China and Russia.

US Energy Secretary Chris Wright has asserted on Wednesday Beijing won’t have any claims to revenue from Venezuela’s oil production, disrupting Caracas’ existing mechanism for repaying billions of dollars owed to Chinese creditors.

The step seems quite severe because China became Venezuela’s largest crude customer and most important foreign creditor after years of US sanctions. In fact, Chinese state banks had extended more than $60 billion in oil-backed lending to Venezuela by 2015. By 2025, however, the outstanding debt was believed to have fallen to at least $10 billion.

The deal therefore serves two purposes for Washington. First, securing access to Venezuela’s oil and second, reducing Beijing’s economic influence over the country’s energy sector.

For China, the immediate economic impact may be limited because its exposure to Venezuela has already declined. Crude from the country accounted for only 4% of the country’s total oil imports in 2025. No Venezuelan cargoes have been recorded arriving in China since the Trump administration assumed control of the assets following the capture earlier this year of then President Nicolás Maduro.

China’s reaction so far has been relatively muted. Foreign Ministry spokesperson Guo Jiakun said China’s legitimate rights and interests in Venezuela “must be protected,” at a regular briefing in Beijing on Thursday. “Cooperation between China and Venezuela is protected by international law,” he added. “It doesn’t concern any third party.”

However, the geopolitical significance of the action could be much larger. Analysts say the arrangement could establish a precedent for Washington to use its influence to exclude Chinese interests from strategically important assets in Latin America.

“South America has long been a geopolitical crossroads where the interests of China and the US intersect and, at times, collide,” said Liao Na, founder of energy research focused firm GL Consulting. “Given the importance both powers attach to Venezuela, friction is almost inevitable whenever their interests overlap.”

In that sense, Venezuela’s oil deal is about more than crude. It is becoming a test of how far the Trump administration is prepared to go to reassert US economic and geopolitical dominance in the Western Hemisphere.

(With inputs from Reuters and Bloomberg)