Trump to refill US oil reserve with Venezuelan crude as Canada faces new competition

CALGARY — US President Donald Trump said Sunday the United States will be using its newfound control over Venezuela’s crude oil to refill America’s depleted Strategic Petroleum Reserve.In a Truth Social post, Trump said he would “fill up” the reserve because it had been “virtually emptied” during “Sleepy Joe Biden’s” tenure as president.“The ‘topping out’ process will begin very shortly, and is a gift from Venezuela to the People of the United States,” Trump said..According to Bloomberg, the reserve currently holds about 289.7 million barrels, roughly 40% of its more than 700-million-barrel capacity, after successive releases under both Trump and Biden.The news comes after Trump announced on Friday that the US was taking control of roughly 65 billion barrels of Venezuela’s proven reserves in partnership with private businesses.US officials said the plan would create the world’s second-largest private oil company by reserves, with the US controlling 55% of effective output and obtaining the oil at cost..Acting Venezuelan President Delcy Rodríguez described the deal as a 25-year bilateral project that will develop new oil fields, significantly raise production targets and attract investment to rebuild infrastructure degraded by decades of under investment, sanctions and political turmoil.She said it includes 17 strategic oilfields with a production target of more than 1.5 million barrels per day (bpd).Currently, Venezuela produces roughly one million bpd despite vast claimed reserves, with infrastructure problems, unreliable electricity and environmental liabilities slowing down any recovery.A gradual increase would also reintroduce competition for Canadian heavy crude in the US Gulf Coast market, which accounts for roughly 10% of Canada’s oil exports to the US.Canada produces more than 5.3 million bpd and sends about 90% of its oil exports to the US.The Venezuela deal comes as US-Canada trade talks have collapsed, with Trump having imposed a 50% tariff on $20 billion of Canadian goods, attacked Canada’s auto industry, and signed an executive order renaming Lake Ontario “Lake America.”On Truth Social, he also shared a link describing the Venezuela arrangement as putting “Canada on notice.”.Those recent developments have heightened urgency within the Canadian energy sector, with industry leaders such as Trans Mountain Corp. CEO Mark Maki saying recently that the collapse of trade talks and rising geopolitical tensions are making the construction of a second pipeline to the West Coast more critical.“Events around us have made (the West Coast pipeline) much more urgent, and I think that’s actually good. It’s helpful,” Maki told Reuters.Currently, the existing 890,000 bpd Trans Mountain line is already running near full capacity as Canadian production continues to grow.With a new pipeline proposed by Alberta Premier Danielle Smith’s UCP government and backed by the Alberta Petroleum Marketing Commission, Pembina Pipeline, and Trans Mountain still in the concept stage, and with the approval deadline for the proposal set for October 1 by the federal Major Projects Office (MPO), Ottawa has been looking to prioritize export capacity as part of broader efforts to reduce dependence on the US market and diversify exports to other markets, particularly Asia — something Canadian energy analysts say is prudent as the Venezuela deal underscores the risk of remaining heavily reliant on one customer.“You need to be more mobile. You need to be more flexible, and you actually need to explore new markets,” Toronto-based energy analyst Dmitriy Frolovskiy told CBC..Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute, also noted one potential offset from the ongoing situation, saying that an opening could appear in the Pacific heavy-oil market if Venezuelan crude is redirected from China to the US, thereby allowing Canada to potentially take advantage of the opportunity, since shipping times to China are substantially shorter from Vancouver than from Venezuela.“It takes 45-55 days to get Venezuelan oil to China and only 18-20 days to get it from Vancouver,” Exner-Pirot said.

Trump to refill US oil reserve with Venezuelan crude as Canada faces new competition

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