Already a subscriber? Make sure to log into your account before viewing this content. You can access your account by hitting the “login” button on the top right corner. Still unable to see the content after signing in? Make sure your card on file is up-to-date.
President Donald Trump has announced that the oil from his new Venezuela deal will be used to refill the Strategic Petroleum Reserve.
Some shit you should know before you dig in: Over the weekend, President Trump announced an agreement with Venezuela that would give the US what he called “majority U.S. control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela, at no cost to the American Taxpayer.” He billed it as “THE BIGGEST OIL DEAL IN WORLD HISTORY!” and said Marco Rubio, Pete Hegseth, and Venezuelan interim President Delcy Rodríguez negotiated it. According to both governments and an anonymous US official, Washington and a Venezuelan private operator nobody has identified are going in together on a new company, and that company gets century-long concessions on fields that have never been drilled. The US share works out to 55% of what the company effectively produces, part equity and part an option to buy the crude at what it costs to pull out of the ground. Neither side has released a document anyone can actually read.
What’s going on now: In a post on Truth Social Sunday, Trump blamed Biden for leaving the Strategic Petroleum Reserve “virtually” empty, said the “topping out” would start soon, and called the Venezuelan crude a “Gift from Venezuela to the People of the United States.” The stockpile sat at roughly 290 million barrels on Aug. 21, the thinnest it has been since 1982, drawn down under both administrations to blunt price spikes from the Ukraine invasion and now the Iran war.
Rodríguez laid out her side in a televised address, calling the 25-year project historic. Seventeen oilfields are in play, with production meant to open above 1.5 million barrels a day, and eight more blocks sitting undeveloped behind them. Venezuela collects $19 on every barrel it pumps and ships north, which she put at roughly $209 billion a year against a $65 benchmark price. “Venezuela retains ownership and sovereignty over its resources, while utilizing capital, technology and operational capacity to leverage the recovery of a strategic industry that has been severely hit by sanctions,” she said.
The announcement has led to two different reactions on Capitol Hill. Sen. Chris Van Hollen said Trump “put our service members at risk to get Venezuelan oil for his billionaire buddies” and alluded that the US only intervened due to oil. Sen. Bernie Moreno defended it, saying that without Trump, “Maduro would still be in power, Venezuelan oil would be going to China at half price.”
This all comes as the industry waits for details nobody has provided, including who pays for the infrastructure and who the private operator actually is, with Chevron and Exxon both declining to comment.
