Trump: "Up to 50 Million Barrels of Venezuelan Oil to Be Delivered to U.S."... Checks China, Stabilizes U.S. Oil Prices

Trump: "Venezuelan Crude Oil to Be Sold at Market Price"
"Proceeds Will Be Used for the Benefit of Venezuelans and Americans"

Social Media Truth Social

On January 6 (local time), U.S. President Donald Trump announced that "the Venezuelan interim government will deliver 30 million to 50 million barrels of crude oil, which had previously been subject to sanctions, to the United States."

President Trump posted on the social media platform Truth Social, stating, "This oil will be sold at market price."

He added, "The proceeds from the sale will be kept under my control as President of the United States and will be used to benefit both the people of Venezuela and the American people."

He also said, "I have instructed Energy Secretary Chris Wright to implement this plan immediately," and added, "The oil will be transported via storage tankers and brought directly into U.S. unloading ports."

Previously, President Trump had stated, after the arrest of Venezuelan President Nicolas Maduro, that "American oil companies will return to Venezuela to rebuild the energy infrastructure," emphasizing, "We are in control."

Subsequently, the U.S. government began discussions with Venezuelan authorities on exporting Venezuelan crude oil to American refineries, and in less than a day, Venezuelan oil is already being transported to the United States.

This move is interpreted as an attempt to block crude oil supplies to China and to stabilize U.S. oil prices by lifting the ban on imports of Venezuelan oil.China has been the largest buyer of Venezuelan crude over the past decade.

The swift action by the United States appears to be driven by concerns over declining Venezuelan oil production. In December of last year, the Trump administration designated the Venezuelan regime as a "Foreign Terrorist Organization (FTO)" and completely blocked sanctioned oil tankers from entering or leaving Venezuela.

As a result, Venezuela was unable to ship millions of barrels of oil stored in tankers and storage tanks. With storage space running out, the Venezuelan state oil company PDVSA was forced to reduce its output.

According to the Financial Times (FT), citing analysts, if Venezuela further cuts oil production, there could be significant delays in restarting production in the future. A source familiar with Venezuela's oil situation said, "If the stored oil cannot be moved, production could fall by about one-third within four weeks, dropping to an average of 600,000 barrels per day."

According to energy consulting firm Kpler, Venezuela had been producing about 900,000 barrels per day on average. Production fell by about 8% immediately after the U.S. sanctions. If the sanctions continue, output is expected to drop to around 600,000 barrels per day by February.