US President Donald Trump has announced on social media that oil from a recent deal with Venezuela will be used to replenish the US Strategic Petroleum Reserve, an emergency stockpile that has been sharply drawn down in recent years to respond to global supply disruptions and high fuel prices.
In a post on Truth Social, Trump wrote that the reserve had been made “virtually” empty, blaming former President Joe Biden. He said the “topping out” process will begin shortly, describing the Venezuelan oil as a “Gift from Venezuela to the People of the United States”.
It remains unclear how quickly the Venezuela deal could provide oil for the reserve or deliver any near-term benefit to US motorists. The agreement, announced on Friday, aims to revive Venezuela’s battered oil industry, but it will require significant investment and infrastructure work before production can rise substantially.
The US reserve held about 290 million barrels as of August 21, near a 44-year low, after drawdowns under both the Biden and Trump administrations in response to global supply disruptions, including Russia’s invasion of Ukraine and the current US-Israel war on Iran.
Venezuela’s interim President Delcy Rodriguez said in a televised address on Saturday that the “historic” deal with Washington involves handing over 65 billion barrels of Venezuelan oil over 25 years, allowing Venezuela to develop its oil industry while preserving “ownership of and sovereignty” over its resources.
The project envisages the development of 17 strategic oilfields with an initial production target of 1.5 million barrels per day. The broader plan also includes the development of eight greenfield oil blocks as part of a wider expansion of the country’s energy sector.
Under the deal, $19 from every barrel of oil produced and sold to the US will flow to Caracas, an arrangement that could be worth $209 billion per year to Venezuela, depending on oil prices, Rodriguez said. Venezuela will keep ownership of its natural resources “while leveraging capital, technology and operational expertise to support the recovery of a strategic industry that has been severely affected by sanctions”.
Caracas has been under pressure to act in line with Washington’s demands since January, after US special forces abducted then-President Nicolas Maduro and Venezuela’s Supreme Court handed leadership to his vice president, Rodriguez.
Source: www.aljazeera.com