Trump announced yesterday that the United States now owns Venezuela’s oil reserves. Since the oil is not located within our borders and we do not have a national oil company, what does this mean, and how will it benefit average Americans?
Details are scarce at this point, but it is relatively clear that Chevron now possesses some exclusive rights to exploit the reserves. It apparently has made some investment commitments in exchange for those rights. Trump probably considers Chevron to be an “American” oil company, but in reality, its shares are owned by people all over the world. In addition, given the fairly high cost of exploiting Venezuela’s reserves, this may or may not be a good deal for the owners of Chevron. In short, as a business transaction, there are plenty of uncertainties about the virtues of this agreement in the long run.
As to the hundreds of millions of Americans who do not own shares of Chevron, how do we gain from this deal? It may be that Chevron has agreed to make payments of some sort to the US government, which would offset to some extent the fiscal impact of Trump’s war and tax cuts, but it would hardly make us rich. If the idea is to drive down prices permanently by creating a major new source of supply, it will probably result in less drilling in America and elsewhere. If the plan is to, in effect, create a world oil reserve that is not subject to Iranian influence–in other words, to make Chevron a swing producer in times of crisis–I doubt that would make economic sense for Chevron.
In short, there is plenty of reason to doubt that Trump has found a way to make imperialism pay off for America even if he can make the deal stick over the likely opposition of an elected Venezuelan government at some point in the future, which is questionable at best.