Time to outline the reality...
Fact Check Team: Biden administration allowing Chevron to drill oil in Venezuela
https://turnto10.com/news/nation-wo...ng-energy-sources-strategic-petroleum-reserve
The Biden administration making headlines this weekend for allowing Chevron to drill oil in Venezuela. The National Desk’s Fact Check Team is investigating the arrangement to see if it’s really about lowering gas prices.
A license from the Treasury Department that was just issued on Saturday allows Chevron to resume "limited" energy production in Venezuela. It is valid for six months.
Under the agreement, none of the sales directly profit Venezuela but instead pay down the $4.2 billion debt owed to Chevron, according to the Wall Street Journal.
According to the administration, the license was issued because the U.S. supports the humanitarian efforts underway in Venezuela. Renewed negotiations between the Maduro regime and its opposition are working to allocate state resources for things like food, education and electricity initiatives for Venezuelans.
The decision has nothing to do with the U.S. needing more oil or lowering gas prices. According to the White House, it has everything to do with those negotiations.
However, it’s important to note that at the beginning of the year, right after Russia invaded Ukraine, according to Reuters, the U.S. looked at lifting sanctions in Venezuela that were imposed under the Trump administration because of corruption.
According to the Associated Press, a senior U.S. administration official said that easing the sanctions was not to boost global energy production in connection to Russia and Ukraine “and that the decision was not expected to impact global energy prices.”
Former President Donald Trump’s economic adviser, Stephen Moore, says it makes absolutely no sense for the White House to allow Chevron to drill for oil in Venezuela. In a recent interview, he scolded the administration for not allowing more drilling here in the U.S.
Because of Venezuela's history of corruption and its abundant oil supply, it's likely that the Biden administration’s actions will continue to face criticism.
Meanwhile, Sen. Bob Menendez, D-N.J., chairman of the Senate Foreign Relations Committee, says the humanitarian agreement is urgently needed but he warns if Maduro takes advantage of the situation, the U.S. must snap back the full force of sanctions.
The U.S. Strategic Petroleum Reserve is at its lowest level in 38 years and the Biden administration plans to release 180 million barrels from it by the end of this year but the administration does have a plan to replenish some of this supply.
In October, the White House announced the administration would repurchase crude oil for the reserve if the prices of oil per barrel dropped to roughly $67 to $72 or less.
They picked this range because it would give companies assurance of future oil demand and a Biden administration official said this specific range would be low enough to be considered a “good taxpayer investment.”
But it’s worth noting that under the previous administration, former President Donald Trump directed the Department of Energy to purchase oil for the reserve when prices were even lower at $30.
The cost of oil is now higher than the administration’s threshold. Government data for two of the most widely used benchmarks of oil prices — which are WTI and Brent — and as of Nov. 21, prices for WTI hovered around $80 and Brent was closer to $88.
Those prices are changing all the time but it looks like prices could fall more. Even though we are a little higher than that $67 to $72 benchmark, oil prices have been falling.
There are a few things behind these lower prices. For one thing, it’s normal for oil prices to drop during the fall after the summer driving season winds down but demand for fuel usually picks back up in December.
Additionally, global demand is lower because COVID restrictions in China have kept demand weaker there and some of the world’s major economies — like the United Kingdom — have signaled that they are heading toward a recession.
