Quick overview

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Venezuela would give up to 50 million barrels of oil to the United States, according to President Donald Trump, which would be worth about $2.8 billion at current market prices. He also announced that the cargoes would be sold. The announcement, made late Tuesday and with few details, marked a significant step forward for the US government in its efforts to boost its economic influence in Venezuela and beyond following the weekend overthrow of leader Nicolás Maduro.

It’s also a setback for China, a close ally and previously the country’s largest oil buyer.

Trump posted on social media, saying, “I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil to the United States of America.

“This oil will be sold at its market value, and as President of the United States of America, I will be in charge of that money to make sure it is used to help the Venezuelan people.”

The amounts mentioned by Trump would total roughly 30 to 50 days of Venezuelan oil production before the US’s partial blockade, significantly lower than previous levels. Following Trump’s remarks, the US oil benchmark, West Texas Intermediate, dropped as much as 2.4 percent and is currently trading near $56 per barrel.

Requests for additional information were not answered by the White House or the US Energy Department.

Venezuela’s production has sharply declined due to decades of neglect and the departure of many foreign oil companies despite having the largest proven crude reserves in the world. Today, less than 1% of the world’s supply comes from Venezuela. According to analysts, a major recovery in output will take years and require billions of dollars in investment.