The Venezuelan flag with an oil rig behind it. The Venezuela oil deal has emerged as a new front in the broader US-China geopolitical competition. (Shutterstock/vectorfusionart)

The Venezuela Oil Deal Is Really About China

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Washington’s move into Venezuela’s oil sector could reshape Chinese influence in Latin America. 

President Donald Trump announced a “Historical Oil Agreement to Secure American Energy Dominance and Drive Venezuela’s Economic Recovery.” On the surface, the deal is about oil: The White House describes the Venezuela oil deal as “the biggest oil deal in history,” which gives the US government “control of more than 65 billion barrels of proven oil reserves in Venezuela,” or 20 percent of Venezuela’s total proven reserves. The deal grants North American Blue Energy Partners (NABEP) concessions for oil fields and the right to extract oil, and it gives the Pentagon’s Office of Strategic Capital a 35 percent equity share in the company. Overnight, this Pentagon-NABEP partnership became the second-largest oil company by proved reserves in the world, second only to the state-backed enterprise Saudi Aramco. Proponents of the Venezuela oil deal celebrate it for strengthening US power in the global oil market, bolstering US energy security, and potentially lowering oil prices. 

The real importance of the Venezuela deal, however, is not about oil; it’s about China. The United States and China are engaged in the Second Cold War that is being fought on multiple fronts: affirmation of Taiwan’s territorial sovereignty, tariffs and global trade (from........

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