US To Get 50 Million Barrels Of Venezuelan Crude

The US President said Venezuela’s interim government will turn over between 30 million and 50 million barrels of oil to the United States. It is a move likely to reshape regional politics.

The President, speaking on social media and in brief public remarks, said the oil would be sold at prevailing market prices and that the United States government would control proceeds. He said the arrangement will be a benefit for both Venezuelans and Americans. The announcement comes just days after a US military operation led to the capture of Venezuelan President Nicolás Maduro.

Energy Secretary Chris Wright has been instructed to move fast. According to the directive, he has been asked to carry out the plan without delay, with the oil to be lifted onto storage vessels and shipped straight to unloading terminals in the United States.

Big Number, Small Impact

30 to 50 million barrels sounds hefty. In reality, it is not. The United States burnt through just over 20 million barrels a day over the past month. Traders say the headline number grabs attention, but the math tempers expectations.

That arithmetic also explains why gas prices are unlikely to move much. When then-President Joe Biden released about 180 million barrels from the Strategic Petroleum Reserve in 2022, the US gas prices fell by only 13 to 31 cents a gallon over four months, according to a Treasury Department study.

Muted Market Response

Following the announcement, the market response has been muted. US oil slid about $1 a barrel, or just under 2%, to $56. Dealers said the reaction reflected uncertainty over timing, logistics, and how quickly the barrels would actually reach the market.

Revenue Potential is Real

Where the numbers do add up is in revenue. Venezuelan crude is trading close to $55 a barrel. If Washington manages to sell the full volume at market prices, proceeds could range from roughly $1.65 billion to $2.75 billion. That assumes buyers are willing and legal hurdles are cleared.

Administration officials have pitched the sale as a way to unlock value from oil stranded by sanctions. Market participants say demand for heavy crude remains strong, especially among US Gulf Coast refiners, though discounts may apply.

Venezuela has been sitting on large crude stockpiles since the US tightened its oil embargo late last year. Turning over up to 50 million barrels would likely draw heavily on those reserves. Some of the oil could also come from seized tankers that were already enroute to customers.

Limited Global Impact

Analysts remain sceptical if this plan will meaningfully shift global oil supply or prices. Even if companies return to Venezuela, they would want political stability and legal clarity first. And any fresh investment would take years to translate into higher output. For now, the market is watching cautiously.

Sources:

CNN

BBC