Trump: "U.S. to Refill Strategic Reserves With Venezuelan Oil"... Direct Investment in Oil Also Planned (Comprehensive)

U.S. Government to Invest in 35% Stake of NABEP
Pursuing Priority Purchase Rights for 20% of Crude Output
SPR at Lowest Level in 44 Years
Large-Scale Supply Expected to Take Time
Legal Uncertainties Remain

U.S. President Donald Trump announced that he will refill the U.S. Strategic Petroleum Reserve (SPR) with Venezuelan crude oil, after the stockpile fell to its lowest level in 44 years. As the U.S. government moves forward with an unprecedented energy agreement granting it direct interests in Venezuela's large oil field development, Trump said he intends to use the secured crude oil to strengthen America's energy security.

U.S. President Donald Trump. The White House

On August 30 (local time), President Trump wrote on Truth Social, "One of the things I will do with Venezuelan oil is refill the national strategic reserves," adding that "the procedure to fill it completely will very soon begin." He described Venezuelan crude oil as "Venezuela's gift to the American people."

As of August 21, the SPR stood at approximately 290 million barrels, its lowest level since 1982 over the past 44 years. Both the Biden and Trump administrations released reserves as global oil supplies were disrupted by Russia's invasion of Ukraine and the Iran war.

President Trump's latest remarks come as a follow-up to a large-scale U.S.-Venezuela energy agreement signed recently. On August 28, Trump announced that the United States, through partnerships with private companies, had secured a controlling stake in more than 65 billion barrels of Venezuela's proven crude oil reserves.

The U.S. government secures a 35% stake in an oil company... Direct intervention due to sluggish private investment

According to the Wall Street Journal (WSJ), the U.S. government is seeking to acquire a 35% stake in North American Blue Energy Partners (NABEP), a private firm operating in Venezuela’s oil sector, and to secure priority rights to purchase 20% of NABEP’s crude oil output at cost.

NABEP will be granted rights by the Venezuelan government to develop 17 oil fields. These fields reportedly contain about 65 billion barrels of crude oil, which is roughly one-fifth of Venezuela's total proven reserves. The WSJ reported that NABEP will be given development rights over a span of 100 years for those fields.

This agreement was arranged as the Trump administration intervened directly when U.S. energy companies showed reluctance to invest in Venezuela. Although the Trump administration urged major U.S. oil companies such as ExxonMobil and ConocoPhillips to expand investments in Venezuelan oil fields, the companies remained cautious, citing aging infrastructure, security concerns, and legal uncertainties.

The WSJ reported that the Office of Strategic Capital (OSC) under the Department of Defense plans to structure the deal so that the U.S. government can secure a stake in NABEP without committing large funds, using the so-called ‘penny warrant’ method. However, the Department of Defense drew a line concerning reports that the OSC could directly own shares in the private company.

The Department of Defense maintains that the OSC's legal authority is limited to loans, loan guarantees, and structuring investment deals. Therefore, further clarification is needed on how the U.S. government will legally and financially hold the 35% stake in NABEP.

It may take time before the SPR is actually replenished

Although President Trump said the process to refill the SPR will begin "very soon," it is likely to take considerable time before Venezuelan crude is supplied in large volumes for U.S. reserves.

Venezuela holds the world's largest proven oil reserves but currently produces only about 1.25 million barrels per day. Due to aging facilities, massive investment and infrastructure improvements are needed for significant production increases.

Analysts suggest that political motivations are also at play in this agreement. While global energy supplies are under pressure from the Iran war, the Trump administration is seeking to highlight its success in securing long-term Western Hemisphere oil sources ahead of the U.S. midterm elections in November.

The WSJ, citing sources involved in the negotiations, reported that President Trump wanted to present the Venezuela agreement as a means to protect U.S. consumers from rising Middle Eastern energy prices.

Legal uncertainties also remain. Venezuela’s 1999 constitution stipulates that national oil reserves belong to the Republic of Venezuela and cannot be transferred. If a change in government occurs, the new administration could raise legal disputes about this agreement.

This content was produced with the assistance of AI translation services.