North American president guarantees that the deal will “benefit the people of Venezuela”
United States President Donald Trump said on Tuesday night that Venezuela will deliver between 30 million and 50 million barrels of oil to the United States, which will be sold at market value and with revenues controlled by the US.
Venezuela’s interim authorities will hand over the “sanctioned oil,” Trump announced in his Truth Social.
The United States will use the proceeds “to benefit the people of Venezuela and the United States!” he wrote.
Energy Secretary Chris Wright was instructed to “execute this plan, immediately,” and the barrels “will be taken by storage vessels and brought directly to unloading docks in the United States.”
CNN has contacted the White House for more information.
A senior administration official, who spoke on condition of anonymity, told CNN that the oil has already been produced and put into barrels. Most of the oil is currently on boats and will now go to US facilities in the Gulf of Mexico to be refined.
While 30 to 50 million barrels of oil sounds like a lot, the United States has consumed just over 20 million barrels of oil per day over the past month.
That amount might lower oil prices a bit, but it probably won’t lower gas prices for Americans that much: Former President Joe Biden released about four to six times as much — 180 million barrels of oil — from the U.S. Strategic Petroleum Reserve in 2022, which only lowered gas prices by 4 to 8 cents per liter over four months, according to a Treasury Department analysis.
American oil fell by about 1 dollar per barrel, that is, just under 2%, to 56 dollars, immediately after Trump made his announcement on Truth Social.
The sale of up to 50 million barrels could generate a lot of revenue: Venezuelan oil is currently trading at $55 per barrel, so if the United States can find buyers willing to pay the market price, it could get between $1.65 and $2.75 billion from the sale.
Venezuela has accumulated significant crude reserves since the United States began its oil embargo late last year. But delivering so much oil to the United States could deplete Venezuela’s own oil reserves.
The oil almost certainly comes from both its onshore storage and some of the seized tankers that were carrying oil: 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 tankers were carrying about 15 million to 22 million barrels of oil, according to industry estimates.
It is not known for sure when Venezuela will deliver the oil to the United States.
The senior administration official said the transfer would happen quickly because Venezuela’s crude oil is very heavy, meaning it cannot be stored for long.
But crude oil does not spoil if it is not refined within a certain period of time, said Andrew Lipow, president of Lipow Oil Associates, in a note. “It has been underground for hundreds of millions of years. In fact, much of the oil in the Strategic Petroleum Reserve has existed for decades,” he wrote.
