President Donald Trump on Saturday mentioned the US would take management of Venezuela’s massive oil reserves and recruit American firms to make investments billions of {dollars} to refurbish the nation’s gutted oil business.
Venezuela is sitting on a large 303 billion barrels value of crude — a couple of fifth of the world’s international reserves, in accordance to the US Energy Information Administration (EIA).
A US-led revamp may ultimately make Venezuela a a lot larger provider of oil and will create alternatives for Western oil firms and will function a brand new supply of manufacturing. It may additionally hold broader costs in verify, though decrease costs would possibly disincentivize some US firms from producing oil.
The type of oil Venezuela is sitting on — heavy, bitter crude — requires particular gear and a excessive stage of technical prowess to course of.
The United States, the world’s largest oil producer, has mild, candy crude, which is nice for making gasoline however not a lot else. Heavy, bitter crude just like the oil from Venezuela is essential for sure merchandise made in the refining course of, together with diesel, asphalt and fuels for factories and different heavy gear.
Unlocking Venezuelan oil could possibly be significantly helpful to the United States: Venezuela is close by and its oil is comparatively low-cost.
Venezuela is dwelling to the biggest confirmed oil reserve on Earth, however its potential far outweighs its precise output: Venezuela produces solely about 1 million barrels of oil per day — about 0.8% of worldwide crude manufacturing.
International sanctions on the Venezuelan authorities and a deep financial disaster contributed to the decline of the nation’s oil business — however so did a scarcity of funding and upkeep, in accordance to the EIA.
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