The United States will use Venezuelan crude to refill the Strategic Petroleum Reserve, President Donald Trump said on Sunday on social media.
Describing the move as a “Gift from Venezuela to the People of the United States,” President Trump said the “topping out” will begin soon, as quoted by Reuters.
The Strategic Petroleum Reserve has been drawn close to minimum operational levels amid a surge in U.S. crude oil exports in response to the crisis in the Middle East. As of August 21, per Reuters, the SPR held 290 million barrels. This was the lowest level in almost 44 years.
The “gift” that President Trump expects from Venezuela, however, may take a while to reach its destination. Venezuela exported 1.16 million barrels of crude oil daily last month, a slight decline from June’s 1.2 million barrels daily, on lower withdrawals from storage. The fact it needs draws from storage to top up exports suggests production is not rising as fast as some may hope.
There are also port capacity constraints, with reports from earlier this month saying tankers have to wait for as long as 30 days to load, as ports struggle with power outages and quality problems with the crude oil getting shipped out. Still, in July, exports to Venezuela’s biggest oil destination—the United States—averaged 786,000 barrels daily, which was the highest since early 2019.
Last week, meanwhile, news broke that the U.S. federal government is negotiating a direct ownership stake in the country’s high-yield field that contains combined reserves of 90 billion barrels of crude. Currently, Venezuela is pumping oil at a daily rate of 1.25 million barrels per day. To boost this, a lot of investments would be required, with Rystad Energy estimating the total for the next ten years at some $180 billion.
By Irina Slav for Oilprice.com
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