Donald Trump announces that Venezuela will cede between 30 and 50 million barrels of oil to the United States. The plan, implemented immediately
President Donald Trump declared, on Tuesday evening, that Venezuela will cede to the United States between 30 and 50 million barrels of oil, which will be sold at market value, and the revenues will be controlled by the US, reports CNN.
Oil industry PHOTO: Shutterstock
The interim authorities in Venezuela will give up the “sanctioned oil”, Trump said on Truth Social.
The US will use the proceeds”for the benefit of the people of Venezuela and the United States!”, he wrote.
Energy Secretary Chris Wright has been instructed to “implement this plan immediately”and the barrels”will be taken overby storage vessels and transported directly to unloading docks in the United States”.
CNN has reached out to the White House for more information.
A senior administration official, who spoke on condition of anonymity, told CNN that the oil had already been produced. Most of it is currently on ships and will be transported to US facilities in the Gulf to be refined.
Although 30-50 million barrels of oil seems like a large amount, the United States has consumed just over 20 million barrels of oil per day in the past month.
That amount might reduce the price of oil a little, but it probably won't reduce the price of gas for Americans by much: Former President Joe Biden released four to six times that much — 180 million barrels of oil — from the U.S. Strategic Petroleum Reserve in 2022, which reduced the price of gasoline by just 13 to 31 cents a gallon over four months, according to a Treasury Department analysis.
US oil fell about $1 a barrel, or just under 2%, to $56 immediately after Trump made the announcement on Truth Social.
Selling up to 50 million barrels could generate quite a lot of revenue: Venezuelan oil is currently trading at $55 a barrel, so if the United States can find buyers willing to pay the market price, it could get between $1.65 billion and $2.75 billion from the sale.
Venezuela has built up significant oil reserves since the United States began an oil embargo late last year, but handing over so much oil to the United States could deplete Venezuela's own oil reserves.
The oil almost certainly comes from both its land deposits and some of the seized oil tankers. The country has about 48 million barrels of storage capacity and was nearly full, according to Phil Flynn, senior market analyst at Price Futures Group. The tanks were carrying between 15 and 22 million barrels of oil, according to industry estimates.
It is not clear when Venezuela will deliver the oil to the United States.
A senior administration official said the transfer would be quick because Venezuela's crude oil is very heavy, meaning it cannot be stored for long periods of time.
But crude oil doesn't go bad unless it's refined within a certain period of time, said Andrew Lipow, president of Lipow Oil Associates.
“It's been underground for hundreds of millions of years. In fact, much of the oil in the Strategic Petroleum Reserve has been around for decades,” he wrote.
