President Donald Trump announced Sunday that oil obtained through his administration’s newly reached agreement with Venezuela will be directed toward replenishing the Strategic Petroleum Reserve, which has fallen to levels not seen in decades following major drawdowns in recent years.
In a social media post, Trump said the process of “topping out” the reserve would begin soon, calling the Venezuelan crude a “Gift from Venezuela to the People of the United States.”
Questions remain over how quickly oil supplied under the Venezuelan agreement could begin flowing into the U.S. reserve or whether the arrangement will have an immediate impact on fuel costs for American consumers. The broader deal unveiled by Trump on Friday is intended to rebuild Venezuela’s struggling petroleum industry, an undertaking expected to require substantial investment and improvements to the country’s energy infrastructure before production can increase significantly.
As of August 21, the Strategic Petroleum Reserve contained approximately 290 million barrels, putting the emergency stockpile near its lowest level in 44 years. Oil has been released from the reserve under both the Biden and Trump administrations amid international supply disruptions, including those stemming from Russia’s invasion of Ukraine and the conflict with Iran.
The announcement came a day after Venezuelan interim President Delcy Rodriguez disclosed additional details about the energy agreement with Washington, saying the arrangement would run for 25 years and seek to increase crude production to 1.5 million barrels per day while maintaining Venezuelan sovereignty over the country’s natural resources.
In an address Saturday night, Rodriguez characterized the agreement as “historic,” saying it could play a major role in reviving Venezuela’s economy, expanding government revenues and determining the country’s economic direction in the years ahead.
“This 25-year bilateral project envisages the development of 17 strategic oilfields with a production target of more than 1.5 million barrels per day,” Rodriguez said on state broadcaster VTV.
“That figure relates solely to the bilateral agreement between Venezuela and the United States.”
Rodriguez said the planned 1.5 million barrels per day represents an initial production objective. The wider initiative also calls for developing eight previously undeveloped oil blocks as Venezuela seeks a broader expansion of its energy industry.
President Trump first unveiled the arrangement Friday, announcing plans for the United States to obtain partial control over Venezuela’s enormous petroleum reserves. The administration is betting that American companies can help rehabilitate the country’s badly weakened oil sector while creating an additional source of crude that could contribute to lower fuel prices in the United States.
Trump offered relatively few specifics about the structure of the agreement, saying the United States had obtained majority control over more than 65 billion barrels of Venezuela’s proven petroleum reserves through a partnership involving private industry.
Although Venezuela possesses the largest proven oil reserves in the world, its current output stands at only about 1.25 million barrels per day, considerably below its potential. Years of inadequate investment, poor management and international sanctions have taken a heavy toll on the country’s oil industry.
Rodriguez estimated that the agreement could ultimately produce approximately $209 billion in revenue for the Venezuelan government if oil averages $65 per barrel, while acknowledging that petroleum prices could change. She said Venezuela would receive approximately $19 from every barrel produced and sold through the agreement, potentially providing a major new source of government income.
The Venezuelan leader insisted that the arrangement does not surrender the country’s control over its petroleum resources. She said Venezuela would retain “ownership of and sovereignty” over 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.”
The agreement has nevertheless encountered opposition inside Venezuela. Earlier Saturday, dozens of groups supportive of the government assembled in central Caracas to demonstrate against the U.S. presence in the country.
Despite those protests, Rodriguez publicly embraced the energy arrangement following Trump’s announcement, arguing that it would stimulate Venezuela’s economy while generating additional revenue for the government.
Venezuelan authorities are now preparing to finalize agreements as early as next week that would award new exploration and production rights to several energy companies, including firms based in the United States.
Two people familiar with the negotiations said Friday that Chevron is among the companies expected to complete discussions aimed at moving its existing Venezuelan joint ventures into the new energy framework.
