Venezuela to Deliver 30-50 Million Barrels of Oil to US: Trump
In a recent announcement, President Donald Trump disclosed that Venezuela will deliver between 30 million and 50 million barrels of oil to the United States. This oil is set to be sold at market value, with the proceeds intended to benefit both Venezuelans and Americans. The interim authorities in Venezuela will oversee the transfer of what has been termed “sanctioned oil.”
Key Details on Oil Transfer
Energy Secretary Chris Wright has been instructed to implement this plan without delay. The oil will be transported by storage ships directly to unloading docks in the United States.
Current Status of Venezuelan Oil
A senior administration official indicated that the oil is already produced and stored in barrels, primarily situated on boats awaiting transport to U.S. facilities for refinement. Venezuela has accumulated significant reserves as a result of the U.S. oil embargo imposed late last year.
- Venezuela’s crude oil stockpiles are estimated to be between 15 million and 22 million barrels.
- The country has a storage capacity of approximately 48 million barrels, which is nearly at full capacity.
The announcement has implications for U.S. oil prices. While the addition of 30 to 50 million barrels could lower prices, it is unlikely to have a substantial impact on consumer gas prices. In comparison, former President Biden released about 180 million barrels from the Strategic Petroleum Reserve in 2022, which only modestly reduced gas prices by 13 to 31 cents per gallon.
Market and Financial Implications
Currently, Venezuelan oil is trading around $55 per barrel. Therefore, if the U.S. successfully sells the oil at market price, it could generate revenues ranging from approximately $1.65 billion to $2.75 billion. However, the transfer of such a large quantity of oil might strain Venezuela’s own reserves.
The timeline for this oil transfer remains uncertain, although the administration has hinted at a swift transition. Given that Venezuelan crude is very heavy, it cannot be stored for extended periods, emphasizing the urgency of the operation.
