Trump’s announcement opens debate on Venezuela’s oil capacity

The announcement by the President of the United States Donald Trump, regarding the transfer of between 30 and 50 million barrels of Venezuelan oil to the US market opened a new debate about Venezuela’s operational capacity to fulfill a shipment of that magnitude. According to the president himself, the crude oil will be transported by sea to US ports.

“The oil will be transported in tankers and taken directly to the unloading docks in the United States,” Trump said in a social media post.

Analysts consulted by cnn They agree that the announced volume would not imply an immediate increase in Venezuelan oil production, but rather would be covered with crude oil already extracted and stored. Part of that oil is found both in land deposits and in ships that have been seized or detained, in a context marked by the sanctions imposed by Washington at the end of last year.

Venezuela has accumulated significant crude oil inventories due to the reduction of its exports, especially to Asia. The country’s total storage capacity is estimated at about 48 million barrels, meaning a transfer of up to 50 million could consume virtually all of its available reserves, said Phil Flynn, senior market analyst at Price Futures Group.

From the US administration, a senior official who spoke with cnn On condition of anonymity, he assured that the oil is already produced and stored, mainly on board ships. Those shipments would be redirected to refineries located on the United States Gulf Coast, where Venezuelan heavy crude oil can be processed.

Although an official schedule has not been specified, the authorities indicated that the operation would be carried out quickly, given that this type of crude oil presents greater difficulties in prolonged storage.

Production, inventories and transportation

Jaime Brito, energy analyst and executive director of OPIS by Dow Jones, explained to cnn Spanish that the announced volume is equivalent to between 30 and 50 days of Venezuelan production, considering that the country currently produces between 900,000 and 1.1 million barrels per day, according to data from the state PDVSA. Therefore, he stressed that the determining factor is the availability of crude oil already stored.

“From September to October, Venezuelan oil exports had been significantly reduced in the so-called ghost fleet to China and that is why Venezuela had been accumulating oil, and in recent days there were reports that they no longer had anywhere to store crude oil and that therefore they were going to have to lower their oil production,” Brito explained.

In this scenario, the shipment to the United States arrives “at the right time,” said the analyst, “because it gives Venezuela the opportunity to send that crude oil.”

The sea journey from Venezuela to the coast of the Gulf of Mexico would take, on average, between five and six days, according to estimates by OPIS, Oil Price Information Service.

“There are gigantic ships that can transport up to 2 million barrels of crude oil more or less. In other words, we are talking about between 15 and 25 ships that would arrive in the United States. We would have to see in what period of time, whether in a week or a month, but the United States has the capacity to absorb all that volume,” he added.

The role of seizures

Tanker seizures have also been a key factor in facilitating the transfer of crude oil. This Wednesday, the United States confiscated the oil tanker Sophia, linked to Venezuela, which was transporting around 2 million barrels, according to data from the Kpler firm.

“The M Sophia is transporting around 2 million barrels of Merey crude oil, loaded from the José Oil Terminal between December 26 and 29, as confirmed by satellite images and port reports seen by Kpler,” said Emmanuel Belostrino, senior oil market data manager at the consultancy.

In December, another ship, the Centuries, was seized with a similar cargo, according to Matt Smith, chief US analyst at Kpler. Together, the previously seized oil tankers carried between 15 and 22 million barrels, according to industry estimates.

Despite the volume involved, analysts agree that the impact on the US market would be limited, given that the country consumes more than 20 million barrels of oil a day.

Venezuela, which has the largest proven crude oil reserves in the world – estimated at around 303 billion barrels – maintains reduced production due to the deterioration of its infrastructure, international sanctions and logistical restrictions. Recovering historical levels of extraction would require investments close to US$58 billion, so even with US participation, it would take years for the country to once again consolidate itself as a key supplier for the US market.

With information from CNN in Spanish.