The US is gobbling up Venezuelan oil, but will it lower fuel prices?
Summary
The US government announced a deal with Venezuela to control part of its large oil reserves and increase oil production for the US market. However, experts say this deal will not reduce fuel prices in the US soon, as the oil is costly to extract and global prices have actually risen since the announcement.Key Facts
- Venezuela has about 303 billion barrels of proven oil reserves, the largest in the world.
- The US is partnering with North American Blue Energy Partners (NABEP), owned by Venezuelan businessman Alejandro Betancourt, to access these oil reserves.
- The Pentagon’s Office of Strategic Capital will own 35% of NABEP, which can produce about 200,000 barrels of oil per day.
- The US is guaranteed the right to buy 20% of the oil output at cost.
- Venezuelan interim leader Delcy Rodriguez supports the deal, which helps Venezuela’s government get funds.
- Since January 2024, the US has imported around 500,000 barrels of Venezuelan oil daily, about 40% of Venezuela’s oil output.
- Despite the deal, US oil prices rose from about $83-$86 per barrel to above $90 after the announcement.
- Venezuela’s oil is heavy and sour crude, which is more expensive to process than lighter oils.
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