President Donald Trump stated Tuesday evening that Venezuela will transfer 30 million to 50 million barrels of crude to the United States, to be sold at prevailing value and with the profits overseen by the US.
Provisional authorities in Venezuela will hand over “sanctioned petroleum,” Trump commented on Truth Social.
The US will utilize the proceeds “to benefit the populace of Venezuela and the United States!” he penned.
Energy Secretary Chris Wright has been instructed to “execute this scheme, right away,” and the barrels “will be collected by storage tankers, and brought straight to unloading docks in the United States.”
CNN has reached out to the White House for further details.
A high-ranking administration figure, speaking under pledge of anonymity, informed CNN that the petroleum has already been produced and placed in barrels. The bulk of it is presently on vessels and will now proceed to US facilities in the Gulf to be refined.
Although 30 to 50 million barrels of crude sounds like a substantial quantity, the United States used just over 20 million barrels of oil daily over the past month.
That sum may reduce fuel prices somewhat, but it likely will not reduce Americans’ petrol prices that much: Former President Joe Biden released approximately four to six times as much — 180 million barrels of oil — from the US Strategic Petroleum Reserve in 2022, which lessened gas prices by only between 13 cents and 31 cents a gallon over the span of four months, per a Treasury Department assessment.
US oil dropped about $1 a barrel, or just under 2%, to $56, instantly following Trump making his proclamation on Truth Social.
Marketing up to 50 million barrels could generate considerable income: Venezuelan petroleum is presently being exchanged at $55 per barrel, so if the United States can locate buyers prepared to pay the going rate, it could bring in between $1.65 billion and $2.75 billion from the transaction.
Venezuela has amassed considerable inventories of crude since the United States initiated its oil boycott late last year. But yielding that much oil to the United States might drain Venezuela’s own petroleum stores.
The crude is virtually certainly originating from both its onshore holding areas and some of the seized tankers that were conveying oil: The nation has about 48 million barrels of storage potential and was nearly full, according to Phil Flynn, senior market analyst at the Price Futures Group. The tankers were transporting roughly 15 million to 22 million barrels of oil, per industry estimations.
It remains unclear over which duration Venezuela will surrender the oil to the United States.
The senior administration official mentioned the conveyance would occur swiftly because Venezuela’s heavy crude is very thick, which suggests it cannot be stored for extensive periods.
But crude does not spoil if it is not refined within a certain timeframe, remarked Andrew Lipow, the president of Lipow Oil Associates, in a memo. “It has remained underground for hundreds of millions of years. Indeed, much of the oil in the Strategic Petroleum Reserve has been around for decades,” he wrote.
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