‘Gift from Venezuela’: Trump says oil deal will help refill US strategic reserve

US President Donald Trump announced on Sunday that oil acquired through a recently signed agreement with Venezuela will be utilized to replenish the Strategic Petroleum Reserve, which has significantly diminished over the years due to global supply constraints and escalating fuel costs. In a social media post, Trump stated, "One of the things I am going to do with the Venezuelan oil is fill up the Strategic National Reserves which, because of sleepy [former president] Joe Biden, has been virtually emptied."

The process of replenishing the reserve, known as "topping out," is expected to commence shortly. According to data from the Energy Department, crude oil stocks in the US Strategic Petroleum Reserve declined by approximately 5.3 million barrels in August, reaching a record low of 293.4 million barrels since 1982. The reserve, established in 1975, serves as a buffer against potential future supply disruptions following the 1973 oil embargo.

The deal grants a US-backed entity control over 65 billion barrels of Venezuela's oil reserves, but production, transportation, and considerable infrastructure investments remain necessary prerequisites. Notably, much of Venezuela's crude is classified as extra-heavy oil, which does not satisfy the reserve's minimum standards. The US has previously drawn upon this reserve as the Iran conflict disrupted oil flows from the Arabian Gulf through the Strait of Hormuz, which typically accounts for roughly one-fifth of global petroleum.

Under the recently announced agreement, the US secured a stake in Venezuela's oil reserves nine months after the military captured then-President Nicolas Maduro, who now faces narcotics-related charges in New York. Interim Venezuelan President Delcy Rodriguez hailed the deal as "historic" in a televised address, asserting that it would span 25 years while enabling Venezuela to develop its oil industry while preserving "ownership of and sovereignty" over its resources.

Rodriguez also emphasized that the oil reserves would transform from "an inert, cold statistic" into "concrete solutions." The project aims to develop 17 strategic oilfields, with an initial production target of 1.5 million barrels per day.