Hyperoxia is known to cause an increase in the blood oxygenation level dependent (BOLD) signal that is primarily localised to the venous vasculature. This contrast mechanism has been proposed as a way to measure venous cerebral blood volume (CBVv) without the need for more invasive contrast media. In the existing method the analysis modelled the data as a dynamic contrast agent experiment, with the assumption that the BOLD signal of tissue was dominated by intravascular signal. The effects on the accuracy of the method due to extravascular BOLD signal changes, as well as signal modulation by intersubject differences in baseline physiology, such as haematocrit and oxygen extraction fraction, have so far been unexplored. In this study the effect of extravascular signal and intersubject physiological variability was investigated by simulating the hyperoxia CBVv experiment using a detailed BOLD signal model. This analysis revealed substantial uncertainty in the measurement of CBVv using the existing analysis based on dynamic contrast agent experiments. Instead, the modelling showed a simple and direct relationship between the BOLD signal change and CBVv, and an alternative analysis method with much reduced uncertainty was proposed based on this finding. Both methods were tested experimentally, with the new method producing results that are consistent with the limited literature in this area.