President Trump's plan for the United States to take majority control of Venezuelan oilfields echoes a century-old era of colonialism and backroom dealmaking with Venezuelan oilmen and politicians, according to energy and geopolitical analysts. While reviving Venezuela's dilapidated oil industry may point in the right direction, the effort will require massive new investment and will unfold on a timeline extending well beyond the administrations of Trump and interim Venezuelan President Delcy Rodriguez—meaning any success would take years to materialize.

"If the U.S. scheme in Venezuela sounds colonial, that's because it is," said Gregory Brew, senior energy analyst at the Eurasia Group. "This is the Trump administration trying to increase U.S. revenue from Venezuelan oil production. It's extremely unusual. It's probably unprecedented in the history of the international oil industry."

The closest historical comparison, Brew said, dates back more than 50 years, when the U.K. held a majority stake in BP (formerly the Anglo-Persian Oil Company) and developed oil resources in Iran and Iraq.

The deal and its structure

Trump announced the agreement over the weekend, calling it the "biggest oil deal in world history." Under its terms, the U.S. would control more than 65 billion barrels of proven oil reserves across 17 oilfields in Venezuela.

Although most details remain unknown publicly, the agreement would operate through North American Blue Energy Partners (NABEP), Venezuela's second-largest private oil producer. The U.S. Department of Defense would hold a 55% stake in the oil production. Chevron, which never left Venezuela after the expropriation of oil assets drove other U.S. companies out nearly 20 years ago, remains the top private producer. That expropriation wave came under former President Hugo Chávez, who nationalized much of the oil sector in 2007, and Chevron has since operated under successive U.S. Treasury licenses that have at times been tightened and loosened depending on Washington's stance toward Caracas.

"The deal more than doubles American oil reserves, dramatically increases domestic supply, and is projected to substantially lower gas prices for all Americans long into the future," the White House said in a statement.

The White House and NABEP did not respond to requests for interviews and additional comment.

Vague on details

NABEP is controlled by Venezuelan businessman Alejandro Betancourt López and his family. López's bank accounts have been under investigation in Switzerland for years, though he has not been formally charged with any crimes. López has cultivated close relationships with both the Trump and Rodriguez administrations.

"On one hand, this individual seems to be in a good position to facilitate this kind of deal," Brew told Fortune. "But, from a certain angle, this looks like an insider deal to profit businessmen who are close to Delcy and who are also close to Trump and his inner circle."

In a statement, Rodriguez said the deal would involve an investment of more than $100 billion—though it is unclear where the funds would come from—and would generate more than $209 billion in tax revenues for Venezuela.

The agreement is poised to be a "political lightning rod" in both Washington and Caracas, since it involves Venezuela ceding a large stake in its natural resources to a country that forcibly removed its former leader, Nicolás Maduro, at the beginning of the year, said Matt Reed, vice president of geopolitical and energy consultancy Foreign Reports.

"It may be years before it meaningfully boosts Venezuelan production and it will likely have to survive a change of administration in both countries," Reed said.

"I'm more curious to see whether Venezuela can attract top-tier U.S. companies, besides Chevron, which benefits from a longstanding relationship there," Reed added. "U.S. firms have the capital and technology Venezuela needs to reach their potential, but they also have reservations given the history and current circumstances. Those companies don't need sweetheart deals or financial aid from the Pentagon; they just need certainty."

Some smaller U.S. producers, such as Hunt Oil, are investing in Venezuela, but the biggest players, such as ExxonMobil and ConocoPhillips, have remained reluctant, even as they explore the possibilities. Both companies exited after the 2007 nationalization and later won multi-billion-dollar international arbitration awards against Venezuela over the seized assets—history that continues to weigh on corporate decisions about returning.

Strategic reserves

Venezuelan oil production has risen this year from just under 1 million barrels per day to more than 1.2 million barrels daily—an increase of almost 250,000 barrels per day. Largely driven by Chevron, that growth has come primarily from optimizing existing oil wells rather than deploying new drilling rigs and teams. Venezuela's oil industry last produced more than 3 million barrels daily at the start of this century and was still above 2 million barrels a day a decade ago, a decline driven by underinvestment, sanctions, and the departure of foreign operators.

Trump quickly pledged to use Venezuelan oil to replenish the U.S. Strategic Petroleum Reserve, which was recently depleted to 44-year lows amid the ongoing war in Iran.

"One of the things I am going to do with the Venezuelan oil is fill up the [SPR] which, because of Sleepy Joe Biden, has been virtually emptied," Trump said on social media.

But using Venezuelan oil to fill the SPR is a virtual impossibility, experts said, because the extra-heavy grades of Venezuelan crude are incompatible with the underground salt cavern storage facilities in Texas and Louisiana that make up the reserve.

"We don't put heavy sour crude into the SPR. So the idea of refilling the SPR from Venezuela doesn't work," said Jim Wicklund, a veteran oil analyst and managing director at energy investment firm PPHB.

The SPR now stands at 286 million barrels, its lowest point since 1982, when it was still being filled during its infancy. It held 415 million barrels when the Iran war began, having been depleted by nearly 130 million barrels in five months. Falling below 300 million barrels already makes the salt caverns less structurally sound, and dropping below 252.4 million barrels would trigger a federal law permitting additional drawdowns only under severe national security declarations.

Regarding Trump's criticism of President Biden, the SPR stood at 638 million barrels when Biden took office in 2021 and was heavily depleted after Russia's invasion of Ukraine sent oil prices soaring.

As for the broader Venezuela deal, Wicklund said he does not see it accomplishing anything beyond potentially giving U.S. companies "a more secure feeling" that their assets would not be expropriated again if the U.S. government is directly invested.

"How the Department of Defense is going to take an equity stake in a foreign oil company is beyond me," Wicklund said. "I don't see the point or the benefit or how it practically happens."

Radhika Bansal, vice president of upstream research at Rystad Energy, said the deal could trigger more "civil unrest" in Venezuela because control of the country's natural resources is a "very, very sensitive topic" for politicians and the public alike. Still, the fact that the two governments have already identified 17 potential projects shows the oil industry is "moving in the right direction" and could be grounds for "cautious optimism." That does not mean the deal will help fill the SPR or lower prices at the pump.

"Even if everything goes as planned, it's going to be a gradual recovery," Bansal said.

This story was originally featured on Fortune.com.