Trump to let Venezuelan oil flow ‘indefinitely’ to US

Core Viewpoint - Donald Trump's announcement regarding the indefinite flow of Venezuelan oil to the US has led to a decline in oil prices and significant market reactions, particularly affecting oil companies and stock indices [6][8][41]. Group 1: Oil Production and Investment Needs - Venezuela's oil production, which was around 3 million barrels per day before 1999, has drastically decreased due to underinvestment and mismanagement, now requiring approximately $183 billion to restore production to previous levels [2][3][57]. - Rystad Energy estimates that $53 billion is needed over the next 15 years just to maintain current production levels at 1.1 million barrels per day, with an immediate requirement of $30 billion to $35 billion in international capital over the next two to three years to make future production goals plausible [2][59]. Group 2: Market Reactions and Stock Performance - Following Trump's announcement, oil prices fell, with Brent crude declining about 1% to $59.90 per barrel and West Texas Intermediate down 0.7% to $56.02 per barrel [8][41]. - The FTSE 100 index experienced its first decline of the year, dropping approximately 0.74% due to weaknesses in commodity prices, particularly affecting oil and mining companies [7][16]. - Major oil companies such as Shell and BP saw significant drops in their stock values, with more than £9.7 billion wiped off the value of FTSE oil companies after the announcement [41][56]. Group 3: US-Venezuela Oil Deal Dynamics - The US plans to sell Venezuelan oil at market prices, with Trump stating that the proceeds will be controlled by the US government to benefit both American and Venezuelan people [5][11][32]. - The deal includes the transfer of 30 million to 50 million barrels of sanctioned crude oil to the US, which is expected to disrupt the supply line to China, historically the largest buyer of Venezuelan oil [33][49]. - US Energy Secretary Chris Wright indicated that the US would supply materials and equipment to support the revival of Venezuela's oil production, aiming to stabilize and eventually increase output [4][30][31].