United States President Donald Trump has announced that Venezuela’s interim authorities will transfer 30 to 50 million barrels of “sanctioned oil” to the United States, a move he described as beneficial for both Venezuelans and Americans.
Trump unveiled the plan days after US abducted the country’s President Nicolas Maduro.
“This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!”
Donald Trump
He added that Energy Secretary Chris Wright has been directed to “execute this plan, immediately,” and the barrels “will be taken by storage ships, and brought directly to unloading docks in the United States.”
Since the abduction of Venezuelan President Nicolas Maduro by US special forces, President Donald Trump has promised US investment in the country’s underproductive oil fields. “We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” Trump said in a Mar-a-Lago news conference on January 3.
He reiterated this on January 4 to reporters on Air Force One, saying, “We’re going to have big investments by the oil companies to bring back the infrastructure. The oil companies are ready to go.”
With oil trading at roughly $56 a barrel, the transaction Trump announced late Tuesday could be worth as much as $2.8 billion.
The US goes through an average of roughly 20 million barrels a day of oil and related products, so Venezuela’s transfer would be the equivalent of as much as two and a half days of supply, according to the U.S. Energy Information Administration.
Despite Venezuela having the world’s largest proven crude oil reserves, it only produces on average about one million barrels day, significantly below the US average daily production of 13.9 million barrels a day during October.
The White House is organizing a meeting Friday with US oil company executives to discuss Venezuela, which the Trump administration has been pressuring to open its vast-but-struggling oil industry more widely to American investment and know-how.
Representatives of Exxon, Chevron and ConocoPhillips are expected to attend the White House meeting, according to a person familiar with the matter who requested anonymity to discuss the plans
Time Frame For Venezuela To Hand Over Oil Unclear
It’s unclear over what time period Venezuela will hand over the oil to the United States.
Venezuela has built up significant stockpiles of crude over since the United States began its oil embargo late last year. But handing over that much oil to the United States may deplete Venezuela’s own oil reserves.
The oil is almost certainly coming from both its onshore storage and some of the seized tankers that were transporting oil: The country has about 48 million barrels of storage capacity and was nearly full, according to Phil Flynn, senior market analyst at the Price Futures Group. The tankers were transporting about 15 million to 22 million barrels of oil, according to industry estimates.
Details about how the funds from the oil sales will be used also remain to be clarified by the US administration
In the days since Maduro’s ouster, Trump and top administration officials have raised anxiety around the globe that the operation could mark the beginning of a more expansionist US foreign policy in the Western Hemisphere.
The President in recent days has renewed his calls for an American takeover of the Danish territory of Greenland for the sake of US security interests and threatened military action on Colombia for facilitating the global sale of cocaine, while his top diplomat declared the communist government in Cuba is “in a lot of trouble.”
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