Trump announced a massive oil deal with Venezuela. Why it won't lower gas prices anytime soon

The announcement by President Trump of a massive oil deal with Venezuela has garnered significant attention, but its impact on gas prices is unlikely to be immediate. The deal grants the U.S. majority control over 65 billion barrels of Venezuela's proven oil reserves, a substantial amount that could potentially influence global oil markets. However, the actual extraction and processing of this oil will take considerable time, not to mention the complexities of lifting sanctions and resolving the country's political instability.

The oil reserves in question are significant, but the current state of Venezuela's oil industry and the sanctions imposed by the U.S. complicate the situation. The Venezuelan oil industry has been in decline due to years of mismanagement and underinvestment, and the U.S. sanctions have further restricted the country's ability to export oil. For the deal to have a meaningful impact on gas prices, there would need to be a significant increase in oil production and export capabilities, which is unlikely to happen overnight.

Looking ahead, market participants should watch for signs of progress on lifting sanctions and the actual increase in oil production from Venezuela. The U.S. Treasury Department would need to issue a specific license to allow Chevron or other U.S. companies to operate in Venezuela, and any easing of sanctions would likely be tied to negotiations over Venezuela's political future. Additionally, the global oil market's response to this deal will also depend on the actions of other major oil producers and the overall balance of supply and demand.

Originally reported by cnbc.com. CurrencyNews adds analysis for finance & markets readers.