U.S. President Donald Trump on Wednesday revealed the details of a proposed agreement with Venezuela’s interim government, claiming the country would transfer between 30 million and 50 million barrels of oil to the United States. In posts on his Truth Social, Trump asserted that the U.S. would oversee the sale of the oil and use the proceeds exclusively to purchase American-made products for Venezuela, calling the deal a boost to U.S. economic interests after American forces captured Venezuelan president Nicolas Maduro to face charges in the USA.
The announcements came amid ongoing developments in Venezuela, where Vice President and oil minister Delcy Rodriguez was formally sworn in as the country’s interim president on Monday. The interim president is backed by Trump, after he claimed that the US will run the country till a proper transition of power can take place.
Trump’s posts detailed the oil handover as a key component of post-regime reconstruction efforts. He wrote yesterday, “I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America. This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!”
He added that he has asked Energy Secretary Chris Wright to execute this plan immediately. Trump said that the oil will be transported by storage ships, and will be brought directly to unloading docks in the United States.
Taking the current market prices of around $55 per barrel, the deal could generate up to $2.8 billion in revenue. Notably, shipment of sanctioned oil from Venezuela, which was taking place through a dark fleet of tankers earlier, has completely stopped after the U.S. military action. As a result, millions of barrels of oil are stranded in the country in storage tanks and tanker ships.
Trump essentially said that the U.S. will sell 30 to 50 million barrels of Venezuelan-sanctioned oil at market prices, and use the proceeds as per his own discretion in the USA and in Venezuela.
The Venezuelan government has yet to confirm the deal, but state-owned oil company PDVSA said it is in negotiations with the US over the sale of crude oil.
In a follow-up post today, Trump claimed that Venezuela is going to be purchasing ONLY American Products using the money from the oil. He posted, “I have just been informed that Venezuela is going to be purchasing ONLY American Made Products, with the money they receive from our new Oil Deal.”
Trump added that the products will include American Agricultural Products, and American Made Medicines, Medical Devices, and Equipment to improve Venezuela’s Electric Grid and Energy Facilities.
He added, “In other words, Venezuela is committing to doing business with the United States of America as their principal partner – A wise choice, and a very good thing for the people of Venezuela, and the United States.”
Trump’s claims mean that Venezuela will be forced to high-priced American products, as the country will have no control over the money received from sale of its oil.
Although the USA produces enough oil to meet its domestic demand, Venezuelan oil is important for the American oil economy. This is because US mostly produces light crude oil, while it has a large number of legacy refineries designed to refine heavy crude. As Venezuelan oil is heavy oil, it is crucial to keep those refineries running. Currently US imports heavy crude from countries like Canada and Mexico to keep those refineries running. Converting a heavy oil refinery to light oil refinery is costly and not practical.
