Trump Says Venezuelan Oil Could Refill Depleted US Reserves. Experts Are Skeptical

President Donald Trump says Venezuelan oil can help refill the United States’ depleted Strategic Petroleum Reserve. Energy experts say that goal is unlikely to materialize soon.

Trump wrote on social media that the “topping out” of the reserve would begin shortly and called the effort a gift from Venezuela to the American people. The reserve, created in the 1970s after an Arab oil embargo disrupted US supplies, can hold more than 700 million barrels in underground salt caverns in Texas and Louisiana. It now contains just under 290 million barrels, its lowest level since the 1980s.

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One of the things I am going to do with the Venezuelan Oil is fill up the Strategic National Reserves

The proposed supply faces technical and commercial obstacles. Venezuelan crude is much heavier than most oil held in US reserves and would need to be converted. Venezuela’s oil industry also requires major investment, while producers would have to operate in a political and legal environment that remains uncertain.

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This project is very unlikely to produce new investment and new production anytime soon

David Goldwyn, a former federal energy official, said the plan was unlikely to generate new investment or production soon. “This project is very unlikely to produce new investment and new production anytime soon,” he said. Goldwyn estimated that it could take at least two years, and possibly five to seven years at best, before production reached the reserve directly or indirectly.

Last week, the Trump administration announced that the federal government had reached a deal to take majority control of 65 billion barrels of proven Venezuelan oil reserves. The White House said the Pentagon would take a 35% equity stake in North American Blue Energy Partners, a private company granted concessions by Venezuela, while the United States would have the right to buy 20% of the venture’s output at production cost. The administration has also said it plans to return 200 million barrels to the reserve within a year after recent drawdowns.

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at least two years, if not five to seven years at best, away from seeing that production reach the SPR, directly or indirectly