Strategy to Lower Oil Prices
US President Donald Trump is reportedly planning to leverage Venezuela’s vast crude reserves to establish control over much of the western hemisphere’s oil supply. According to senior administration officials cited by the Wall Street Journal, the goal is to drive US oil prices down from over $56 a barrel to about $50, cutting energy costs for consumers.
Global Market Context
Oil markets have already faced turbulence, recording a 20% slump in 2025, the steepest annual loss since the Covid‑19 pandemic. This marked the third consecutive year of declines, driven largely by oversupply. Trump’s plan aims to further reshape global pricing dynamics by boosting Venezuelan output.
Control of Venezuelan Reserves
Officials claim the strategy also seeks to block Russia and China’s access to Venezuela’s oil, consolidating a western hemisphere stronghold. The White House confirmed that the US intends to control Venezuela’s oil sales “indefinitely” after laying claim to 50 million barrels of blockaded crude, valued at up to $3 billion.
Trade Conditions
Trump announced that Venezuela would use proceeds from oil sales exclusively to purchase US‑made goods, reinforcing his “America First” economic agenda. The US also seized a Russian tanker linked to Venezuela after a two‑week pursuit, underscoring the geopolitical stakes.
Production Targets and Challenges
If Venezuelan output rises from 1 million barrels per day (bpd) to its former peak of 3 million bpd, US domestic production could reach 14 million bpd—about one‑third of the 40 million bpd produced by OPEC+. However, decades of underinvestment and corruption have left Venezuela’s oil industry in disrepair.
Industry Response
Trump has promised that US oil majors such as Chevron, ExxonMobil, and ConocoPhillips will invest billions to revive infrastructure. Yet reports suggest these companies remain cautious, wary of political risks and operational challenges in Venezuela.