Oil markets are reacting sharply to an extraordinary shift in US-Venezuela energy relations. In a move that underscores rapidly evolving geopolitical dynamics, President Donald Trump announced that Venezuela will supply between 30 million and 50 million barrels of crude oil to the United States, a transfer expected to be sold at market price with revenues under US control.
The unprecedented arrangement comes in the wake of a dramatic US operation in Caracas and has added to volatility in crude prices. The oil will be sold at current market prices, and the money raised will be controlled by the US government.
In a post on his Truth Social platform, Trump said Venezuela’s interim authorities would hand over what he described as “high-quality, sanctioned oil” to the US. He added that the money earned from selling the oil would be managed by him as president, with the aim of benefiting both Venezuelans and Americans.
The market reaction was swift. Oil prices fell as traders expected more supply to enter the market in the near term.
US crude oil (WTI) slipped by about 1.3 to 1.6 percent, trading in the mid-$50s a barrel.
Brent crude, the global benchmark, also fell back towards $60 a barrel, reflecting cautious sentiment among investors.
The volume of oil mentioned by Trump is significant but not massive in global terms. It roughly equals a few weeks of Venezuela’s oil production before US restrictions were imposed. Much of this oil has been sitting unused in storage tanks and on tankers because exports were blocked.
The move could also have wider geopolitical effects. Venezuela may have to divert oil that was originally meant for buyers such as China, potentially reshaping existing trade routes. It also highlights the US’s strategic priorities following rising tensions and military actions in the region.
Some critics have also raised concerns about a US president directly controlling revenue from another country’s oil sales and the possible impact on global energy diplomacy.
