Oil to be shipped immediately to US ports
President Donald Trump announced Tuesday that Venezuela will transfer between 30 and 50 million barrels of crude oil to the United States, worth an estimated $2.8 billion at current market prices.
The announcement follows the recent US military operation that resulted in the capture of Venezuelan leader Nicolás Maduro. Trump directed Energy Secretary Chris Wright to execute the plan immediately.
"It will be taken by storage ships, and brought directly to unloading docks in the United States," Trump said on Truth Social.
Market reaction
Oil prices fell following the announcement as traders weighed the additional supply entering the market. WTI crude dropped to around $56 per barrel while Brent crude traded near $60 per barrel on Wednesday.
Analysts noted that the oil transfer adds to an already well-supplied global market, contributing to downward pressure on prices.
Source of the oil
Venezuela has accumulated significant crude stockpiles since the United States began its oil embargo late last year. The country has approximately 48 million barrels of onshore storage capacity, which was nearly full. Additionally, seized tankers were transporting an estimated 15 to 22 million barrels of crude oil.
The transfer represents a substantial portion of Venezuela's stored reserves and marks a significant shift in the flow of the country's oil resources.
Investment talks on the horizon
Looking ahead, Trump is scheduled to meet with representatives from Chevron, ConocoPhillips, ExxonMobil, and other domestic oil producers at the White House on Friday. The discussions are expected to focus on potential investments in Venezuela's oil sector.
Venezuela holds more than 300 billion barrels of proven oil reserves, the largest of any country and nearly four times those of the United States. However, production has declined sharply from approximately 3.5 million barrels per day at its peak in the 1970s to around 960,000 barrels per day due to mismanagement, corruption, and rising extraction costs.
Impact on global markets
The oil transfer also represents a setback for China, which had been the primary buyer of Venezuelan crude and a close economic partner. The shift in Venezuela's oil exports could reshape energy trade patterns in the region.
Market participants will be watching closely to see whether political stability can be restored and whether US investment succeeds in reviving Venezuela's energy infrastructure, potentially adding more barrels to global supply in the future.