The Trump administration is stepping up its efforts to extract oil from Venezuela following the ousting of President Nicolas Maduro. In a social media post Tuesday night, President Donald Trump wrote that Venezuela would sell 30 to 50 million barrels of oil to the U.S., and he would control the money exchanged.
In his post, Trump said the oil “will be taken by storage ships, and brought directly to unloading docks in the United States.” He directed Energy Secretary Chris Wright to execute the plan.
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Speaking Wednesday morning at a conference in Miami, Wright said, “going forward we will sell the production that comes out of Venezuela into the marketplace.”
Venezuela’s oil company Petróleos de Venezuela (PDVSA) confirmed the deal on Wednesday.
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The U.S. currently consumes more than 20 million barrels of oil per day — the most of any country in the world.
“This process is being developed under frameworks similar to those currently in effect with international companies, such as Chevron, and is based on a strictly commercial transaction,” the company wrote in a statement, according to The New York Times.
In a media briefing, White House press secretary Karoline Leavitt said the Trump administration had reached a deal with interim authorities in Venezuela. She said the 30 to 50 million barrels are “sanctioned oil that was basically sitting in barrels sitting on ships because of the effective quarantine” inflicted on Venezuela by the U.S. blockade and sanctions.
She said the oil will arrive “very soon,” and the private sector is working already to market the oil abroad, with all proceeds directed toward both the American and Venezuelan people, “at the discretion” of U.S. leadership.
How much oil is 50 million barrels?
Sold at market price, the oil is expected to cost $2 billion.
The U.S. currently consumes over 20 million barrels of oil per day — the most of any country in the world. The amount of oil Trump is proposing buying from Venezuela would be enough to feed America’s appetite for one- to two-and-a-half days at the most.
Venezuela only produces about 1 million barrels of oil per day. For Venezuela, the proposed transaction would cost the country its entire production for four to seven weeks.
When refined, one barrel of crude oil can yield 20 gallons of gasoline. It’s possible Venezuelan oil could be used to make up to a billion gallons of gas; however, heavy crude like Venezuela’s oil supply is often used to make diesel, jet fuel and as a key ingredient in asphalt.
What are the effects of the US blockade of Venezuela?
The U.S. has made it increasingly difficult for Venezuela to export the oil it currently produces. Sanctions that started during Trump’s first term restricted which countries would be willing to buy Venezuelan oil exports. And for weeks, the U.S. has attempted to block oil tankers carrying Venezuelan crude to global markets after placing sanctions on the tankers directly.
More than two-thirds of Venezuelan oil is sold to China.
The U.S. stopped importing any oil from Venezuela in 2019. After Chevron was granted a waiver and allowed to resume operations, the flow of Venezuelan heavy crude oil to refineries on the U.S. Gulf Coast began again in 2023.
Wednesday morning, U.S. forces seized an oil tanker flying the Russian flag, following weeks of pursuit when the tanker evaded a U.S. blockade.
The blockade has put pressure on PDVSA and infuriated the Chinese who have had one of their oil supplies cut off. Unable to sell as much oil, PDVSA has planned to cut production, as the country’s storage space for excess oil fills and full oil tankers are stuck off the coast.
Chinese foreign ministry spokesperson Mao Ning called the oil deal between Trump and Venezuela an “act of bullying” that “severely undermines the rights of Venezuelan people.”
How has the oil market reacted?
The price of a barrel of oil fell Wednesday on the news that more supply from Venezuela will be unlocked. Crude oil was trading for $56 per barrel early Wednesday afternoon.
The low price could present a challenge for extracting more Venezuelan oil in the future. Beyond the immediate deal for 30 to 50 million barrels, a central tenet of Trump’s plan is for U.S. oil companies to move in and increase the flow of oil coming out of Venezuela’s 300 billion-barrel reserves.
But the oil industry wants higher per-barrel prices to guarantee it can turn a profit from drilling new wells. Even in the U.S. oil rig counts are down by 43 compared to this time last year, according to Baker Hughes — a 7% decrease.
“The Trump administration also wants to ‘drill baby, drill’ in the Permian,” said Daniel Sternoff, a senior fellow at the Center on Global Energy Policy at Columbia University, in a podcast interview. “But when we have sub-$60 prices, just the desire of the White House can’t compel a private industry to act against its commercial or economic interests.”
