President Donald Trump said Venezuela will turn over as much as 50 million barrels of oil to the US, worth roughly $2.8 billion at the current market price, to be sold in the open market with proceeds benefiting both countries. The announcement late on Tuesday, which came with few details, marked a significant step up for the US government as it seeks to extend its economic influence in Venezuela and beyond after the capture of leader Nicolas Maduro over the weekend. It's also a blow to China, previously the top buyer of the country's oil and a close partner, Bloomberg reported. Interim authorities in Venezuela will turn over "sanctioned oil," Trump said on Truth Social. "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!" he added. 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." A senior administration official, speaking under condition of anonymity, told CNN that the oil has already been produced and put in barrels. The majority of it is currently on boats and will now go to US facilities in the Gulf to be refined. Although 30 to 50 million barrels of oil sounds like a lot, the United States consumed just over 20 million barrels of oil per day over the past month. That amount may lower oil prices a bit, but it probably won't lower Americans' gas prices that much: Former President Joe Biden released about four to six times as much — 180 million barrels of oil — from the US Strategic Petroleum Reserve in 2022, which lowered gas prices by only between 13 cents and 31 cents a gallon over the course of four months, according to a Treasury Department analysis. US oil fell about $1 a barrel, or just under 2%, to $56, immediately after Trump made his announcement on Truth Social. 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. It's unclear over what time period Venezuela will hand over the oil to the United States. The senior administration official said the transfer would happen quickly because Venezuela's crude is very heavy, which means it can't be stored for long. — Agencies
