Trump Says Venezuelan Oil Will Refill the U.S.’s Strategic Reserves. Reality Says Don’t Count On It
President Trump announced a historic oil agreement with Venezuela, granting a U.S.-backed venture control over 17 Venezuelan oil fields containing over 65 billion barrels of proven reserves. This represents roughly 7.1% of the world's proven oil reserves. However, the reality of filling the U.S. Strategic Petroleum Reserve (SPR) with this oil is more complex.
The SPR currently holds only 41% of its capacity, and most Venezuelan crude is extra-heavy oil that does not meet the SPR's minimum API gravity standards. Filling the SPR completely would require roughly 420 million barrels, costing around $32 billion at market prices. While the deal might appear attractive, Venezuela currently produces only about 1.25 million barrels per day, and years of underinvestment have crippled its petroleum industry.
The 65 billion barrels are merely proved reserves spread across 17 fields, not an immediate inventory for filling the SPR. The oil is extra-heavy crude from the Orinoco Belt, which does not meet the SPR's specifications and may require blending. Legal questions also surround the deal due to Venezuela's constitution giving the state control over petroleum resources.
Thus, while the Venezuelan oil deal could potentially provide an inexpensive source for rebuilding the SPR, it does not mean that 420 million barrels can suddenly appear in U.S. underground storage caverns.
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