Trump says Venezuelan oil could replenish depleted U.S. stockpiles. Will it?
Summary
President Donald Trump announced a deal for the U.S. government to take a stake in Venezuela's oil reserves, aiming to refill the U.S. Strategic Petroleum Reserve, which is at a very low level. Experts say that Venezuelan oil is heavier than the U.S. oil usually stored and will require time and investment to develop and convert before it can replenish the reserve.Key Facts
- The U.S. Strategic Petroleum Reserve holds under 290 million barrels, the lowest since the 1980s, while it can store over 700 million barrels.
- President Trump announced a new deal giving the U.S. majority control of 65 billion barrels of proven oil reserves in Venezuela.
- The Pentagon will own 35% of North American Blue Energy Partners, the company developing Venezuelan oil fields, with rights to buy 20% of the oil at production cost.
- Venezuelan crude oil is much heavier than the lighter oil normally stored in the U.S. reserve.
- Heavy Venezuelan crude requires mixing with other petroleum products to flow and be processed, making it incompatible with current Strategic Reserve standards.
- Experts predict it could take at least two to seven years for this Venezuelan oil production to help refill the U.S. Strategic Petroleum Reserve.
- The Strategic Petroleum Reserve was created in the 1970s to protect the U.S. from oil supply disruptions.
- The Biden administration released more than 200 million barrels from the reserve to help lower energy prices after the Russia-Ukraine war began.
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