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Oil prices fell on Wednesday after U.S. President Donald Trump declared that Venezuela would transfer 30 million to 50 million barrels of its sanctioned oil to the United States.
"This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States," Trump stated on Truth Social.
Dropping by more than 1% on Wednesday, Brent crude fell below $60 per barrel, while WTI traded around $56.40.
Oil prices have seen wild swings after then-Venezuelan President Nicolas Maduro was captured by U.S. forces and brought to New York to face drug trafficking charges. Starting the week at $60.9 for Brent and $57.47 for WTI with a limited uptick, prices retreated further following the White House's initiatives to open up Venezuela's oil industry.
Despite holding nearly 20% of the world’s proven oil reserves, amounting to 303 billion barrels, Venezuela’s current production is limited to around 700,000 barrels per day, insufficient to sway global prices, especially during a period of soft demand and oversupply concerns.
Trump previously indicated that major U.S. oil companies would be permitted to operate in Venezuela to restore its deteriorating infrastructure. "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, and start making money for the country," he said.
However, the prospect of a rapid production increase faces hurdles such as aging facilities, sustained low oil prices, and political volatility.
The move coincides with a well-supplied crude market, as OPEC+ members maintain existing output levels while signaling potential gradual increases depending on demand.
On Sunday, one day after Maduro’s arrest, eight OPEC+ members confirmed they would maintain output levels through the first quarter of 2026. While they had agreed in November to pause output hikes, the group signaled that the withheld 1.65 million barrels per day may be gradually restored depending on market conditions.
Earlier in 2025, oil prices temporarily exceeded $80 per barrel amid Israel-Iran clashes, but by year-end had dropped roughly 20%, with WTI closing at $56.17 and Brent at $60.85 per barrel.
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