One Hundred Years: What Leo XIII Says About a Contract Between Unequal Parties

One hundred years. That’s the term on the oil concession President Trump announced Friday night, and the number deserves a minute before anything else does. Most of the Venezuelans this contract will govern haven’t been born. Their grandparents didn’t elect the government that signed it. Leo XIII worked out the moral principle that applies here in 1891, and he was writing about a laborer haggling over his wages, not about a country handing over its oil fields. Paul VI later said the same rule binds nations. That’s where this post goes.

The News Story

President Donald Trump announced late Friday that the United States has secured majority control of more than 65 billion barrels of proven Venezuelan oil reserves, calling it in a social media post “THE BIGGEST OIL DEAL IN WORLD HISTORY” and saying it came “at no cost to the American Taxpayer.” Through Saturday, the White House released no text of any agreement, and much of what is known comes from Trump’s post, a statement from Venezuela’s acting president, and officials speaking to reporters.

According to the Associated Press, the U.S. government and an unnamed private operator in Venezuela have formed a new company holding rights to untapped oil fields for 100 years. A statement from Venezuela’s acting president, Delcy Rodríguez, said the arrangement covers 17 fields with a proven potential of 65 billion barrels, could draw more than $100 billion in investment into the country’s oil industry, and could yield over $209 billion in taxes for Caracas. Rodríguez described it as a step toward economic recovery and industry modernization.

Trump said the deal was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Rodríguez. The United States receives 55% of the new company’s effective output, including an ownership stake and the right to buy oil at cost, according to a U.S. official who spoke to the AP on condition of anonymity. That official said American purchases would go to the strategic petroleum reserve and the military, and that the company would be the second-largest corporate holder of proven reserves after Saudi Aramco. It remains unclear what share of the 55% is ownership versus purchase rights, who will fund the infrastructure, and who the private operator is.

The announcement follows the January raid in which American forces captured then-President Nicolás Maduro and brought him to New York to face federal drug trafficking charges. Rodríguez has served as acting president since.

Trump said the deal will lower gasoline prices, which have risen since the outbreak of the Iran war. AAA put the U.S. average at about $4.08 a gallon on Saturday, against $3.20 a year earlier. Energy analysts quoted across outlets said near-term relief is unlikely: Amy Myers Jaffe of New York University said the deal would not change retail prices for Labor Day weekend, and Kevin Book of ClearView Energy Partners said deploying capital on that scale would take many years. Capital Economics’ David Oxley wrote that the deal could on its face double U.S. reserves and cut dependence on Canadian and Mexican crude, but cautioned that Venezuela’s reserves may have been overstated under Hugo Chávez. Chevron and Exxon Mobil declined to comment.

Reaction split sharply. Sen. Bernie Moreno (R-Ohio) called it historic, saying that otherwise “Venezuelan oil would be going to China at half price.” Sen. Tim Kaine (D-Va.) called it “corruption at epic scale,” and Sen. Chris Van Hollen (D-Md.) said Trump “put our service members at risk to get Venezuelan oil.” Ricardo Hausmann, a Harvard economist and former Venezuelan planning minister, called it a “shameful deal” and said Rodríguez lacks constitutional power to commit the country. Venezuelans protested in Caracas on Saturday. Whether Congress has any role is unclear.¹

Catholic Social Teaching Analysis

The Rule Leo XIII Wrote for a Wage

The analysis begins in 1891, with a factory worker and an employer at a table.

Leo XIII grants the obvious thing first. “Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages.” Then he keeps going, and the second half of the sentence is the part that made Rerum Novarum an earthquake: “nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.”²

Read that last clause slowly. The workman agreed. He signed. And Leo XIII calls what happened to him force.

The insight underneath is about pressure. A man who has to eat this week will sign nearly anything offered on Tuesday, and his signature tells you almost nothing about whether the terms are fair. It tells you he was hungry. The contract still has to answer to a standard that sits outside the negotiation, one that neither party invented and neither can vote away.

Paul VI took that principle and applied it where Leo XIII hadn’t. In Populorum Progressio he wrote that Leo’s teaching “is still valid today: when two parties are in very unequal positions, their mutual consent alone does not guarantee a fair contract; the rule of free consent remains subservient to the demands of the natural law.” Then he made the extension explicit. The principle “was set down with regard to a just wage for the individual worker; but it should be applied with equal force to contracts made between nations.”³ A few lines earlier he had said plainly that market prices freely agreed upon “can turn out to be most unfair” when the nations involved are far from equal.⁴

The Church has an actual test for a deal like this one, and it is not “did both sides sign.”

Measuring the Inequality

Apply the test. What’s the gap between these two parties?

One of them captured the other’s head of state in a night raid eight months ago and has him in a New York courtroom. One of them sent its Defense Secretary to help negotiate an oil contract, which is an unusual seat at a commercial table. One of them is asking for $100 billion in investment because its refineries and pipelines have been falling apart for two decades. One of them will hold 55% of the output of every barrel for the next century, with the right to buy at cost.

Whatever else is true about Delcy Rodríguez’s government, it was negotiating from the floor.

The Compendium of the Social Doctrine of the Church saw this pattern coming in the raw-materials trade specifically. It names “the continuing deterioration in terms of the exchange of raw materials” between rich and poor countries and lays out the ethical criteria that international economic relations have to meet: the common good and the universal destination of goods, equity in trade relationships, and attention to the rights and needs of the poor in trade policy.⁵ Equity, in that sentence, is doing work. It means the terms have to be defensible to someone who wasn’t in the room.

Whose Oil Is It

Here’s where the Church says something that cuts through the legal fog.

The Compendium teaches that “the subject of political authority is the people considered in its entirety as those who have sovereignty,” and that a people transfers the exercise of that sovereignty to representatives while keeping the thing itself. It then adds a line worth memorizing: “The mere consent of the people is not, however, sufficient for considering ‘just’ the ways in which political authority is exercised.”⁶

Sovereignty over Venezuela’s oil sits with Venezuelans, and it stays there while an acting president and a foreign secretary of state sign papers about it. A government exercises that sovereignty on loan, and it can spend the loan badly. Hausmann’s objection, that Rodríguez has no constitutional power to bind the country for a century, is the secular version of a claim the Church makes on firmer ground.

The same logic runs through the Church’s teaching on property itself. Ownership has never been absolute in Catholic thought. “The right to private property is subordinated to the right to common use, to the fact that goods are meant for everyone,” and property is therefore “in its essence only an instrument” for the universal destination of goods, a means rather than an end.⁷ Oil in the ground under Zulia is a created good ordered to human flourishing, first for the people standing on top of it.

This raises the question of when the text finally appears. Set aside how much America got, and ask what happens to the $209 billion in projected taxes, who in Venezuela receives it, and whether the poorest Venezuelans, the ones the Compendium says have a claim of “particular concern” under this very principle, are better fed in ten years.⁸ Douglas Borjas, the man the AP found in a Caracas market on Saturday, put it in one sentence: Venezuela’s resources can be developed, but for the benefit of the people rather than a corrupt elite. He’s asking the Catholic question without the footnotes.

The Objection Worth Answering

The strongest case for the deal deserves a fair hearing, because it’s a serious one.

Venezuela’s oil industry is wrecked. Production runs millions of barrels a day below what the country once managed. Capital has to come from somewhere, and no domestic source exists. Refusing foreign investment on principle would leave Venezuelans exactly where they are, which is poor, and the Church herself has warned against that romance. The Compendium is blunt: countries that tried to develop “by isolating themselves from the world market” suffered stagnation, and the real problem is “gaining fair access to the international market.”

But look at how that sentence finishes. Fair access, “based not on the unilateral principle of the exploitation of the natural resources of these countries but on the proper use of human resources.”⁹ The Church wants the capital to come. She rules out one particular way of bringing it: an arrangement where a strong country’s unilateral terms convert a weak country’s minerals into someone else’s balance sheet, with the local population functioning as scenery.

Both halves of that sentence bind. A Catholic who cites only the first half is cheerleading, and one who cites only the second is romanticizing poverty.

What This Asks of You

Notice how the deal is being sold to Americans. It’s being sold on the price at your pump: $4.08 a gallon Saturday, against $3.20 last August. That framing is the temptation here, and it’s aimed squarely at Catholics who vote.

You can want cheaper fuel. Most people do, and there’s nothing wrong with wanting your grocery run to cost less. What you can’t do is let the number on the sign at the corner station become your measure of whether a hundred-year contract between two countries is just. Leo XIII’s whole point was that the party under pressure signs anyway, and that his signature settles nothing. Countries get hungry the same way men do.

The honest position on August 30 is that the text hasn’t been published, so nobody arguing about this has read it. Insist on seeing it. Ask for the document. Ask who pays for the pipelines, where does the oil physically go, what share stays in Venezuela, and whether a government the Venezuelan people actually recognize will ratify a deal binding their great-grandchildren. Those are five questions any Catholic can hold in mind while the details come out, and they’re better than a team jersey.

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This story turns on the principle that consent between grossly unequal parties does not by itself make a contract just.

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Notes

1. ↑ Collin Binkley and Juan Pablo Arráez, “What We Know about Trump’s Deal Giving US Access to Vast Oil Reserves in Venezuela,” Associated Press, KSAT, August 29, 2026, ksat.com; “Trump Announces Deal with Venezuela to Secure More Than 65 Billion Barrels of Oil Reserves,” CNBC, August 28, 2026, cnbc.com; “Trump Says U.S. Has Entered Deal with Venezuela to Take Control of 65 Billion Barrels of Oil Reserves,” NPR, August 28, 2026, npr.org; “Trump Says US Reaches Deal with Venezuela to Control 65 Billion Barrels of Country’s Oil Reserves,” CNN, August 28, 2026, cnn.com; “Trump Says U.S. Now Has Majority Control of Over 65 Billion Barrels of Venezuelan Oil Reserves,” CBS News, August 28, 2026, cbsnews.com; “Trump Says Massive Venezuela Oil Deal Will Slash US Gas Prices,” Fox News, August 28, 2026, foxnews.com; “Trump’s Venezuela Push Runs into Hard Realities for US Energy Giants,” Fox News, August 29, 2026, foxnews.com; “Democrats Sound Alarm on US-Venezuela Oil Deal: ‘This Isn’t a Win,’” The Hill, August 29, 2026, thehill.com; “Trump’s Venezuela Oil Deal May Not Lower Gas Prices Anytime Soon,” Newsweek, August 29, 2026, newsweek.com; “What We Know about Trump’s Deal Giving U.S. Access to Vast Oil Reserves in Venezuela,” The Washington Times, August 29, 2026, washingtontimes.com.
2. ↑ Leo XIII, Encyclical Letter Rerum Novarum (May 15, 1891), no. 45, vatican.va.
3. ↑ Paul VI, Encyclical Letter Populorum Progressio (March 26, 1967), no. 59, vatican.va.
4. ↑ Paul VI, Populorum Progressio, no. 58.
5. ↑ Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church (Vatican City: Libreria Editrice Vaticana, 2004), no. 364, vatican.va.
6. ↑ Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church, no. 395.
7. ↑ Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church, no. 177, quoting John Paul II, Encyclical Letter Laborem Exercens (September 14, 1981), no. 14.
8. ↑ Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church, no. 182.
9. ↑ Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church, no. 447, quoting John Paul II, Encyclical Letter Centesimus Annus (May 1, 1991), no. 33.