Audrey Streb
DCNF Energy Reporter
The Trump administration’s capture of socialist Venezuelan dictator Nicolás Maduro has thrown the region into uncertainty while presenting opportunities that could give the U.S. a geopolitical and economic advantage.
Once a global energy powerhouse, Venezuela’s oil sector now produces a fraction of what it did before former dictator Hugo Chávez nationalized the industry. If President Donald Trump’s gambit proves successful, the U.S. could revitalize the Venezuelan oil industry and leverage its resources to refill America’s depleted Strategic Petroleum Reserve (SPR), several energy policy experts and economists explained to the Daily Caller News Foundation.
Former President Joe Biden authorized a massive drawdown and sale of SPR oil in 2022, ahead of midterm elections and record-high gas prices that bogged down his fellow Democrats. After releasing about 200 million barrels from the SPR in the months leading up to the midterms, the Biden administration continued to tap into the U.S. emergency oil stockpile to bring down gas costs ahead of the 2024 election.
Numerous energy experts since cautioned that it could take “decades” to refill the SPR following Biden’s releases, with some experts previously explaining to the DCNF that the former administration’s moves posed a national security concern.
“The Strategic Petroleum Reserve can serve not only a militarily strategic interest, but also an economically strategic interest,” the chief economist at The Heritage Foundation, EJ Antoni, told the DCNF, arguing that refilling the SPR could also position the U.S. government to set a price floor to the benefit of smaller operators and American investors in the event of an oil glut. (RELATED: Venezuelan Oil Could Make America ‘Master Of The Hemisphere’ If Trump’s Domination Continues)
Most of Venezuela’s crude oil exports are flowing to China, and some energy policy experts are optimistic that if Trump’s plan to “run” or otherwise partner with the Latin American nation pans out, the U.S. could eventually leverage its resources to benefit both American companies and the Venezuelan people.
Revitalizing Venezuela’s oil industry raises numerous questions, and several industry insiders previously told the DCNF that American companies are cautious about new development under the current uncertainty.
David Blackmon, an energy and policy writer who spent 40 years in the oil and gas business, told the DCNF that U.S. dominance of Venezuela’s oil industry would present a golden opportunity for it to refill America’s oil reserves, though the process would be bogged down by government bureaucracy and take several months.
Trump said in his inaugural speech that his administration would replenish the SPR, though Energy Secretary Chris Wright has confirmed that it will take years to completely refill the reserves. In November, the DOE announced that it is advancing a plan to acquire one million barrels for the SPR.
One industry source that was granted anonymity to speak freely told the DCNF previously that the Venezuela development has not spurred American companies to consider national reserve replenishment possibilities, adding that the administration’s intent to refill the reserve is not dependent on Venezuelan oil.
Jason Isaac, CEO of the American Energy Institute, told the DCNF that “U.S. companies will not commit serious capital to Venezuela without a credible reset on rule of law.”
Isaac continued to note that “the near-term benefit is mostly about refinery optimization and security of supply, not a dramatic global price collapse.” However, a long-term benefit of a U.S. partnership with Venezuela could be critical resource acquisition at discounted rates.
Diana Furchtgott-Roth, director of the Center for Energy, Climate and Environment at The Heritage Foundation, told the DCNF that “expectations of greater supply from Venezuela will lower the prices of oil and make it easier and less expensive to fill the SPR.”
However, Furchtgott-Roth also presented an alternate perspective, arguing the SPR may no longer serve a critical purpose.
“I’m not sure if we need the SPR at all. The biggest SPR we have is right under our feet,” Furchtgott-Roth told the DCNF. “The SPR was conceived of when the United States had very little oil production. … Times have changed.”
The SPR was established in 1975 following the oil crisis in the early 70’s, “primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program,” according to the Department of Energy (DOE). Following the shale-revolution, America shed concerns about oil shortages, becoming the top producer in the world in 2018.
Trump and his allies are eager to extract America’s vast oil and gas reserves, repeating the mantra, “drill, baby, drill.”
“President Trump’s energy dominance agenda has already brought gas prices down across the country, while gradually replenishing the SPR, and they will continue to drop as we unleash American energy,” White House Spokeswoman Taylor Rogers told the DCNF before America’s capture of Maduro.
“Joe Biden’s disastrous green energy policies sent gas prices soaring across the country, making the past four years painfully unaffordable for Americans filling their gas tanks to commute to work, take their children to school, and travel during the summer and holiday seasons,” Rogers continued. “In a desperate attempt to provide an illusion of relief during his 2024 campaign, Joe Biden irresponsibly depleted our Strategic Petroleum Reserve – shamelessly jeopardizing our economic and national security.”
Trump wrote on Wednesday on Truth Social that “I have just been informed that Venezuela is going to be purchasing ONLY American Made Products, with the money they receive from our new Oil Deal.” A DOE factsheet released Wednesday stated that the energy partnership between Venezuela and the oil means “oil sales begin immediately with the anticipated sale of approximately 30 – 50 million barrels. They will continue indefinitely.”
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Bill the DNC for the drawdown?
The Unstated US Goal of Preserving Dollar Hegemony Against Competition from the Euro
Iraq was one of the first OPEC countries, in 2000, to convert its reserves from dollars to euros. At the time a commentator for Radio Free Europe/Radio Liberty predicted that Saddam’s political act “will cost Iraq millions in lost revenue.” In fact Iraq has profited handsomely from the 17 percent gain in the value of the euro against the dollar in that time. – Bush’s Deep Reasons…
If only Dubya had thought of regime decapitation back in 2003 when the real unstated fight was for hegemony of the dollar. Venezuela has been well and truly wobbled and the shock waves of that event have spread. But there is none of the chaos this time around. And the sword of Damocles hangs heavy over Delcy Rodriguez.
I suspect that many of the Chavistas are quietly being shown a variety of retirement community options in other countries willing to take them. They need to be cleared out before it will be safe for genuine free democratic elections and reestablishment of rule of law governance. Machado may well ultimately be elected, but she could not come back now without the protection of a battalion of US soldiers.
Quietly giving Maduro’s supporters a option that Maduro foolishly declined would be a path to a peaceful transition.
As with the Iranians, the Venezuelan people must themselves restore their democracy and rule of law. We can help them somewhat, but ultimately they must craft their own future. The same is true of the USA also. We must restore our country and government. It appears that Trump is doing so yard by yard, but in the end it’s our shared responsibility.
Spot on.
Hard by the yard but a cinch by the inch.
Try to simplify this:
Iff these conflicts would ever cool, then surplus-production breaks the inflation-fever, and SPR-filling purchases resets the petroleum-price ‘floor’ at ~ $42., much like the end-stage of any previous crisis.
On the other hand, the proposed large (+50%) jump in Pentagon budgets ($1.0 trn in ’26 —> $1.5 trn / ’27), i.e. to Cold-War industrial-production levels, implies much higher petroleum demand, in perpetuity.
All this is aside from the larger-scale matter of Natural Gas including stocks of NGL (Liquids, ‘propane’), and the ever-growing wave of LNG exports, which can hardly be stored.
““Joe Biden’s disastrous green energy policies sent gas prices soaring across the country, making the past four years painfully unaffordable for Americans filling their gas tanks to commute to work, take their children to school, and travel during the summer and holiday seasons,”
Not true, the rapid increase in the price of crude oil started in April 2020 as a result of Trump’s deal with Saudi Arabia and Russia to cut their production to benefit US producers. In April 2020 the price was $19.23, $35.57 in May, $40.10 in July, $52.16 in January 2021, all due to Trump. Following the Russian invasion of Ukraine the price increased still further to $114.38 which is when Biden’s use of the reserve started to reduce prices to the optimum ~$70. Replenishment started in 2023.
Source?
The data I found does not correlate to what you posted.
The data I quoted was the West Texas Intermediate (WTI or NYMEX) crude oil prices per barrel.
https://www.macrotrends.net/1369/crude-oil-price-history-chart
Joke Biden told the Speaker of the House that he did not cut NG shipments to Europe when someone in his administration acted on his behalf. Oil averaged about $50 during Trump and $70 during Biden. That Chinese Covid thing caused oil to plummet briefly to $20 in 2020 and that is the only major effect on oil prices in the last 10 years.
Venezuela has heavy sour crude
‘No, please go on!’ Alice said very humbly; ‘I won’t interrupt again. I dare say there may be ONE.’ ‘One, indeed!’ said the Dormouse indignantly. However, he consented to go on. ‘And so these three little sisters–they were learning to draw, you know–’ ‘What did they draw?’ said Alice, quite forgetting her promise. ‘Treacle,’ said the Dormouse, without considering at all this time. Alice did not wish to offend the Dormouse again, so she began very cautiously: ‘But I don’t understand. Where did they draw the treacle from?’ ‘You can draw water out of a water-well,’ said the Hatter; ‘so I should think you could draw treacle out of a treacle-well–eh, stupid?’
So let me get this straight. Biden selling oil in order to reduce gas prices and ease the cost of living crisis was a bad thing. But Trump buying oil in order to keep prices artificially high and make Americans pay more for gas is a good thing.
Don’t question ANYTHING that Trump has said or done. Because they will downvote your post by default here They think the sun shines out of his arse..
Trump is the opposite of Joke Biden….Joke did stupid things – Trump does smart things. Trump is a winner – Joke is a loser…. a low IQ loser.
Bonehead Biden robbed the SPR in an attempt to win an election.
‘ Heritage foundation’ says enough.
It is ok to be a pirate now. Wear the eye patch. Humiliate lesser opponents. Be a total dick. Say that the only one you take into consideration is…yourself and then be PROUD of it. It can’t fall any lower i would say.
But then, i would say that as a commie, leftish marxist woke ideologue people here call me. They can’t think beyond the boundaries or i should say the thought jail they have put themselves into and then accuse the OTHER side of doing the same.
These culture wars are getting ffin pathetic.
Slop…
As soon as Joke was in office, he did his first huge blunder – the Afghan pull out leaving billions in equipment and dead soldiers. I believe Joke’s supporters cheated in the election mostly without Joke’s knowledge so he could deny cheating. There is no “culture war” – it is communist/socialist versus democratic republic like the original founding of the nation. Commies should move to Cuba….your kinda place.