President Donald Trump on Saturday said the United States would take over control of Venezuela’s oil fields, the largest proven oil reserve on the planet. Here is what it means.
Venezuela has roughly 303 million barrels of crude, approximately one-fifth of the world’s global reserves, per the U.S. Energy Information Administration (EIA).
“We’re going to have our very large United States oil companies — the biggest anywhere in the world — go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure,” Trump said a press conference at Mar-a-Lago on Saturday.
American development of Venezuelan oil fields could help lower oil prices; however, it could take years to fully develop the country’s oil production:
A US-led revamp could eventually make Venezuela a much bigger supplier of oil and could create opportunities for Western oil companies and could serve as a new source of production. It could also keep broader prices in check, although lower prices might disincentivize some US companies from producing oil.
Even if international access were fully restored tomorrow, it could take years and incredible expense to bring Venezuelan oil production fully back online. Venezuelan state-owned oil and natural gas company PDVSA says its pipelines haven’t been updated in 50 years, and the cost to update the infrastructure to return to peak production levels would cost $58 billion.