Trump touts Venezuelan oil deal as a way to replenish U.S. strategic reserves
The Trump administration announced a partnership with Venezuela to acquire a stake in its oil fields, claiming it could help refill the Strategic Petroleum Reserve, but experts say technical, financial and legal challenges make the prospect uncertain for years.
The White House said the United States will take a 35% equity stake in North American Blue Energy Partners, a private firm that holds Venezuelan concessions, giving the government the right to purchase 20% of the oil produced at production cost. President Trump promoted the arrangement as a means to top up the Strategic Petroleum Reserve, which currently holds just under 290 million barrels, the lowest level since the 1980s.
Energy analysts note several obstacles. Venezuela’s Orinoco Belt yields extra-heavy crude that differs from the lighter grades stored in the reserve’s underground caverns. "The kind of crude that is produced in Venezuela, which is very heavy, doesn't meet the specifications of the crude that is stored in the caverns," said Daniel Sternoff, a senior fellow at Columbia University's Center on Global Energy Policy. Engineering professor Siddharth Misra added that the dense oil would require processing or blending before it could be stored, and that the Department of Energy has previously concluded that the costs of adapting the reserve outweigh the benefits.
Rebuilding Venezuela’s oil sector is also expected to take years. Former federal energy official David Goldwyn estimated that the United States is at least two to five years, and possibly up to seven, away from seeing any Venezuelan production affect the reserve. He cited the need for billions of dollars in investment to repair wells, pipelines and upgrading facilities, as well as uncertainties about future legal and political conditions in both countries.
The deal follows earlier releases of more than 200 million barrels from the reserve to address high fuel prices during the Russia-Ukraine conflict and recent drawdowns linked to the Iran war. The Department of Energy has indicated a plan to add 200 million barrels back into the reserve within a year, but the feasibility of using Venezuelan heavy crude remains in question.
The White House declined to comment beyond directing inquiries to the president’s social-media post and a fact sheet on the agreement.