TLDR
- Trump announces Venezuela oil deal transferring 30-50 million barrels worth $2.8 billion to US
- Venezuelan oil prices impact: WTI crude drops 2.4% to $56 per barrel after announcement
- US demands exclusive Venezuela oil partnership, ending China’s role as top buyer
- Venezuela oil transfer follows Nicolas Maduro capture by US forces over weekend
- Chevron remains only US company exporting Venezuelan crude under sanctions exemption
President Donald Trump announced a major Venezuela oil deal Tuesday evening, revealing the country will transfer 30 to 50 million barrels of crude oil to the United States. The Venezuelan oil transfer is valued at approximately $2.8 billion based on current oil prices.
The Venezuela oil announcement came days after US forces captured Venezuelan leader Nicolas Maduro over the weekend. Trump said the crude oil will be sold at market price with all proceeds under his control.
Venezuela Oil News Sends Crude Prices Lower
Oil prices dropped following Trump’s Venezuela announcement. West Texas Intermediate crude oil fell 2.4% and is trading near $56 per barrel.
The Venezuelan oil volumes equal 30 to 50 days of the country’s oil production before the US blockade started last month. Trump said storage ships will transport the sanctioned oil directly to US ports.
Energy Secretary Chris Wright will execute the Venezuela oil transfer plan immediately. The US Energy Department and White House have not released additional details about the oil deal.
US Demands Exclusive Venezuela Oil Partnership
The Trump administration told Venezuela’s interim leader Delcy Rodriguez the country must exclusively partner with the US on oil production. ABC News reported the White House also demands Venezuela reduce all economic ties with China, Russia, Iran, and Cuba.
This Venezuela oil policy shift represents a complete political realignment. China was previously the top buyer of Venezuelan crude oil before the US naval blockade began.
Venezuelan oil trade with China has now stopped except for shipments already en route to Asia. The policy change impacts China’s Latin American oil imports strategy.
Venezuela holds the world’s largest proven oil reserves. However, Venezuelan oil production has plummeted due to decades of infrastructure neglect and foreign company departures.
Venezuela now produces less than 1% of global oil supply. Industry analysts say reviving Venezuelan oil production will require years and billions in investment.
Christopher Beddor from Gavekal Dragonomics said China is preparing for all Venezuelan oil shipments to halt. The Trump Venezuela policy will force China to reconsider natural resource imports from Latin America.
Chevron Venezuela Operations Continue
Chevron Corp is the only US company still producing Venezuelan oil under a sanctions exemption. The oil company has scheduled 11 ships to load crude at Venezuelan government ports.
Venezuelan heavy crude oil suits US Gulf Coast refineries perfectly. Companies like Phillips 66 and Valero Energy operate refineries designed for heavy-sour crude processing.
Haris Khurshid from Karobaar Capital called the Venezuela oil transfer politically large but economically small. He described it as a one-time flow rather than a structural oil supply change.
Trump will meet energy executives at the White House next week to discuss rebuilding Venezuela’s oil industry. Oil traders including Trafigura Group will negotiate resuming Venezuelan crude oil purchases with US officials.
