Kathmandu— Former United States President Donald Trump announced on social media that oil acquired through a recent agreement with Venezuela will be used to refill the US Strategic Petroleum Reserve, a national stockpile depleted in recent years due to global supply issues and rising fuel costs. Trump posted on his platform Truth Social that the reserve was “virtually” empty under the previous administration and indicated the ‘topping out’ process would begin shortly, framing the oil as a “Gift from Venezuela to the People of the United States.” The deal aims to revitalize Venezuela's oil industry but requires substantial investment before significant production increases can be realized.

Strategic Reserve at Historic Low

As of August 21st, the US Strategic Petroleum Reserve held approximately 290 million barrels – its lowest level in 44 years. The reserve has been drawn down under both the Biden and Trump administrations to address global supply disruptions stemming from events like Russia’s invasion of Ukraine and ongoing conflicts in the Middle East. This depletion prompted the search for new sources to rebuild the stockpile, leading to the agreement with Venezuela.

Venezuela's Role and Terms of the Deal

The “historic” 25-year deal will allow Venezuela to develop its oil industry while maintaining ownership and sovereignty over its resources. Venezuelan interim President Delcy Rodriguez announced that the project involves developing 17 strategic oilfields with an initial production target of 1.5 million barrels per day, alongside the development of eight new oil blocks. Under the terms of the agreement, Caracas is projected to receive $19 for each barrel of oil sold to the US, potentially totaling $209 billion annually depending on market prices.

Political Context Surrounding the Agreement

The deal comes after a period of political upheaval in Venezuela. Rodriguez assumed interim leadership following an incident earlier this year where former President Nicolas Maduro was reportedly taken into custody by US special forces, and the Venezuelan Supreme Court transferred power to her.

The full impact of the agreement on US fuel prices and the speed at which oil can be delivered remains uncertain, as significant investment and infrastructure improvements are needed to boost Venezuela’s production capacity.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.