Washington, Aug 31:
US President Donald Trump has said oil from a new deal with Venezuela will be used to replenish the US Strategic Petroleum Reserve, as Washington seeks to rebuild emergency crude stocks that have fallen to their lowest level in decades.
Trump said the “topping out” process to refill the reserve would begin shortly, describing the Venezuelan oil as a benefit for the American people. The announcement follows a major new US-Venezuela oil arrangement.
The Strategic Petroleum Reserve currently holds roughly 290 million barrels, its lowest level since 1982. The reserve has been drawn down substantially in recent years, including during efforts to counter global energy disruptions caused by geopolitical conflicts and supply shocks.
Using Venezuelan crude to rebuild the reserve would mark a significant development in US energy policy. Venezuela possesses some of the world’s largest oil reserves, but its oil industry has suffered from years of underinvestment, sanctions and deteriorating infrastructure.
Analysts have cautioned that increasing Venezuelan production and delivering substantial volumes to the US will require significant investment and time. The precise mechanism and timetable for replenishing the reserve with Venezuelan oil also remain unclear.
The move could nevertheless have broader implications for global oil markets, Venezuela’s battered petroleum sector and the evolving relationship between Washington and Caracas.