Trump Venezuela Oil Deal: What It Means for Oil Prices
Donald Trump’s announcement, through his social media platform, that America plans to buy between thirty million and fifty million barrels of oil from Venezuela at the market rate has prompted a great deal of attention in the current state of the Commercial and International Energy Markets. The significance of this announcement indicates a notable change in the relationship between the U.S. and Venezuela.
Details of the Venezuelan Oil Plan
Regarding Venezuela’s oil strategy, Trump announced that the “Interim Authorities” of Venezuela had agreed to sell the U.S. what he described as “high quality” oil. It would be transported by means of storage ships. This will be before being moved directly to the unloading docks in the U.S.
Trump stated that the plan would be executed efficiently by U.S. Energy Secretary Chris Wright. As President, he would start the payment process for the oil. But that eventually the funds would support the interests of both the Venezuelan and American people.
Currently, oil prices are about $56 per barrel. It means this agreement could potentially generate as much as $2.8 billion. Making it a major deal thus far in the ongoing evolution of the Energy and Commercial Trading industry.
Link to Maduro’s Capture and Military Operation
The United States apprehended former Venezuelan President Nicolás Maduro at the conclusion of a military operation designed to end cocaine trafficking by Maduro and associates to the United States. While reports vary, the Venezuelan Attorney General Tarek William Saab stated that at least 24 members of the Venezuelan police and military were killed in this operation. He said also that dozens of police officers and civilians also may have died.
The government of Cuba has said that 32 members of its military and police force who were in Venezuela assisting the Venezuelan military and police force were killed. The Pentagon stated that seven members of the United States military were injured in the operation. While two remain hospitalized.
White House Engagement With Oil Companies
At the same time, the White House is expected to host an Oval Office meeting with representatives from Exxon, Chevron, and ConocoPhillips. It is to discuss the future of the oil industry in Venezuela. Exxon, Chevron, and ConocoPhillips are expected to be at the meeting. This move by the White House signals that it intends to give Exxon, Chevron, and ConocoPhillips and the other United States oil companies the opportunity to explore and develop the large reserves of oil located in Venezuela.
President Trump has stated that the federal government will assume control of the foreign policy of Venezuela. He has also suggested that the leaders of Venezuela must be more aligned with the economic and strategic goals of the United States.
Venezuela Pushes Back
Venezuelan officials have been openly defiant of the warning from President Trump about their situation. Interim president Delcy Rodríguez made it clear that the determination of her future will not come from the United States, but “by God”. She also criticized the use of military force. While the Venezuelan prosecutors announced that they would investigate the death rate for possible war crimes.
Although there were numerous areas of Venezuela empty after the capture of President Maduro. Many of these areas did not see the expected turnout for the demonstration organized by the Government for support of the Military and State Agencies. There were still some very large demonstrations in Caracas. It is where there were thousands of people waving flags. This showed support for the Military and State Agencies.
Presidential Election Fallout in the U.S.
Additionally, during the Republican House Retreat, President Trump also criticized Democrats for not addressing the Military Operations in Venezuela. He argued that there has been a historical bipartisan agreement since the days of Hugo Chavez that the legitimate ruler of Venezuela is not President Maduro.
Maduro was first indicted by the United States for Drug Trafficking and Terrorism in 2020. President Trump’s administration then offered a reward of $50 million for information leading to the capture of President Maduro.
Impact on Oil Prices
According to Energy Information Administration’s March 4, 2020 report, the US consumes approximately 20 million barrels of Crude Oil a day. Therefore, if President Maduro did supply Venezuela’s Oil production. This would meet only a small portion of the US daily consumption for around 2-2.5 days. Although small in scale, the agreement holds significant geopolitical importance. It is likely to affect market attitudes and policy discussions in the latest news on business and global energy connections.
