US will control Venezuela oil sales ‘indefinitely’, official says
The White House said the United States will control the sale of sanctioned Venezuelan oil “indefinitely” as it prepares to lift restrictions on the country’s crude oil on global markets.
Sales are expected to start with 30 million to 50 million barrels of oil and revenue will be controlled by the U.S. government to keep pressure on the Venezuelan government, officials said.
“We’re going to let the oil flow,” Energy Secretary Chris Wright said at a conference with oil and gas executives in Miami.
It is unclear how much of the proceeds from the sale, which analysts expect to generate around $2.8bn (£2.1bn), will be shared with Venezuela.
“We need to have power and control over oil sales to drive the changes that need to happen in Venezuela,” Wright said, adding that some of the money “will flow back to Venezuela.”
White House officials said Wednesday that they are taking the necessary steps to begin marketing the oil and that the administration is working with major banks and commodity firms to make the sales.
The comments offered further insight into the plans President Donald Trump announced on social media Tuesday.
The president said Venezuela will transfer up to 50 million barrels of oil to the United States and sell it at market price.
The money is planned to be deposited into US-controlled accounts, which Trump said he, as president, would control and use for the benefit of Venezuela and the US people.
Secretary of State Marco Rubio said the goal is to distribute the money “in a way that benefits the Venezuelan people, not the corruption or the regime, so we have a lot of leverage to move forward on the stability front.”
The impact of the policy change will depend on the details, analysts said. such as the speed of sales.
Venezuela has some of the world’s largest proven oil reserves, but lack of investment, mismanagement and decades of American sanctions leave it with production of only around 1 million barrels per day; This is less than 1% of global production.
This supply provides critical resources to the Venezuelan government. In recent years, it has been primarily going to China.
But that situation has soured in recent months as the United States stepped up attacks and increased its blockade of Venezuelan tankers as part of a pressure campaign against Maduro.
On Wednesday, Beijing’s foreign minister condemned the US seizure of Maduro and American plans to establish control over Venezuela’s oil resources.
Trump will meet with oil executives at the White House on Friday.
In the short term, American oil company Chevron and U.S. oil refineries set up to process the “heavy” crude characteristic of Venezuelan production are well positioned to benefit from increased oil flows from Venezuela, analysts said.
Such a shift could put pressure on Mexico and Canada, which produce similar crude oil and are currently major sellers to U.S. refineries.
Oil prices, already relatively low due to expectations of stable supply and muted demand, fell further last week on expectations that Venezuela could increase its access to the global market.
But analysts warned that a meaningful increase in the country’s output would require years and billions of dollars in investment, and firms may be hesitant to make that investment, given less risky opportunities in other countries such as the United States and Guyana.
