US Oil Used to Supplement Venezuelan Oil?

Last week, the Department of Energy announced that it had sent 250,000 barrels of emergency exchange oil from the U.S. Strategic Petroleum Reserve to the CITGO refinery at Lake Charles, Louisiana. CITGO, says the Energy Department, requested the oil because of disruptions in supply caused by Hurricanes Gustav and Ike. That's understandable enough. What's not so easy to understand is the fact that CITGO is owned by Petroleus de Venezuela S.A. (PDVSA), the national oil company of Venezuela.

Going back to 1983, the Southland Corporation bought CITGO to provide a sure source of gasoline to their national chain of 7-Eleven convenience stores. Petroleus de Venezuela acquired 50-percent ownership of CITGO in 1986, taking full ownership in January 1990. "With a secure and ample supply of crude oil," states CITGO on their corporate web site, "CITGO quickly became a major force in the energy arena."

So, one might wonder why, when CITGO needed oil because of Gustav and Ike, they got it from the U.S. Strategic Petroleum Reserve, rather than from their "ample supply of crude oil," in Venezuela?

According to the Energy Information Administration, Venezuela is the fourth largest importer of crude oil into the United States. In July 2008 alone, the U.S. imported 1,187,000 barrels of crude oil from Venezuela.

Also See: The End of Oil? Independence Redefined