US Will Control Venezuela Oil Sales ‘Indefinitely,’ Official Says
Recent statements from the White House indicate that the United States will maintain control over the sales of sanctioned Venezuelan oil indefinitely. This move comes as the US prepares to gradually relax restrictions on the country’s crude oil in the global markets.
Key Details on Venezuela Oil Control
– Initial Sales Volume: The US is expected to begin with approximately 30 million to 50 million barrels of oil.
– Revenue Management: The US government will oversee the revenue from these sales, maintaining leverage over the Venezuelan regime.
– Quote from Officials: Energy Secretary Chris Wright emphasized, We need to have that leverage and control of those oil sales to drive changes that simply must happen in Venezuela.
Analysts predict that the revenue from these oil sales could amount to around $2.8 billion (£2.1 billion). However, it’s currently unclear how much of this revenue will be allocated back to Venezuela. White House Press Secretary Karoline Leavitt stated that an agreement had been reached, but Venezuela’s state-run oil company, PDVSA, claimed negotiations were still in progress based on ongoing frameworks between the two nations. PDVSA commented, This process is based on similar rules to those in force with international companies.
Political Reactions and Criticism
Tensions surrounding this move intensified after former President Donald Trump announced on social media that Venezuela would be turning over up to 50 million barrels of oil to the US, which will be sold at market rates. The revenue will be directed to US-controlled accounts for the benefit of both Venezuelan citizens and the US economy.
– Future Plans: White House officials confirmed that preparations to market the oil were underway, collaborating with key banks and commodity firms for sales execution.
– Sanctions Rollback: As part of the strategy, the US aims to selectively lift sanctions that have inhibited Venezuelan crude sales for decades. Wright was quoted saying, We’re going to let the oil flow, indicating that the resulting funds would eventually aid Venezuela.
US Secretary of State Marco Rubio asserted that the objective was to ensure the monies are dispensed in a way that benefits the Venezuelan people—not corruption, not the regime to optimize leverage in stabilizing the country.
Democratic lawmakers quickly criticized the plan. Senator Chris Murphy of Connecticut described it as insane, voicing concerns that it amounted to stealing the Venezuelan oil at gunpoint with vague terms.
Venezuela’s Oil Landscape
Venezuela holds some of the world’s largest proven oil reserves, but chronic disinvestment, mismanagement, and sanctions have led to a stark decline in output—now only about one million barrels per day, contributing to less than 1% of global production. Historically, this oil supported the Venezuelan government, primarily benefiting China in recent years. However, US pressures have disrupted these trading relationships.
Online responses from international figures included Beijing’s foreign minister condemning US efforts to control Venezuela’s oil resources.
Potential Impacts on the Oil Market
Trump is scheduled to meet with oil executives at the White House on Friday. Analysts suggest that the US firm Chevron, along with US refineries equipped to process Venezuela’s heavy crude, may stand to gain significantly from increased oil flow. Chevron remains the last major US oil company operating in Venezuela, while other European companies maintain smaller presences.
The redirection of Venezuelan oil to the US could strain Mexican and Canadian producers, who currently supply similar crude to US refineries. Oil prices, already relatively low due to steady supply and dampened demand projections, dipped further amid expectations of Venezuela’s enhanced access to the global market.
However, analysts caution that a significant increase in Venezuela’s oil production will require years of investment, which firms may hesitate to provide due to less risky prospects in the US and other territories like Guyana.
In conclusion, as the US prepares to control Venezuela’s oil sales indefinitely, the geopolitical landscape is shifting. The benefits for the Venezuelan populace remain uncertain, with significant challenges ahead for the country’s oil industry.