Venezuela reportedly to continue supplying oil to US beyond 50m barrels announced by Trump | Oil
Venezuela will reportedly continue to supply oil to the United States beyond the initial 50 million barrels announced by Donald Trump after the American military captured Nicolás Maduro.
According to CNBC broadcaster, citing White House sources, the US will lift some sanctions against Venezuela to allow oil sales “indefinitely”.
Venezuela will deliver 30 to 50 million barrels of the country’s blockaded crude oil to the United States, Trump said Tuesday. The deal will give the US president the power to sell up to $3bn (£2.2bn) worth of Venezuelan crude trapped in tankers and storage facilities to an already oversupplied global market.
Continued supplies of crude oil from Venezuela could weigh on oil prices, which last year recorded their steepest annual decline since the Covid outbreak and could fall further as oil producers continue to pump out more than the global economy needs.
Global oil prices fell on Wednesday but recovered slightly in morning trading in New York. International benchmark Brent crude fell to just over $60 per barrel on Wednesday, while the US oil price fell 0.9 percent to $56.72 per barrel after falling below $56 earlier.
The oil grab also raises the possibility of a disruption in Venezuela’s oil exports to China, which receives about 80% of its crude oil exports; potentially forcing Beijing to pay higher prices for crude oil and increasing tensions with the White House.
China’s foreign ministry said in a statement on Wednesday that Venezuela “has full and permanent sovereignty over its natural resources and economic activities” and that the United States’ demand that it hand over the country’s oil “violates international law, violates Venezuela’s sovereignty, and harms the rights of the Venezuelan people.”
In a post on the Truth Social platform late Tuesday, Trump said: “This money will be controlled by me as President… It will be received on storage ships and brought directly to unloading ports in the United States.”
Trump said he asked Venezuela’s interim president, Delcy Rodríguez, to allow the United States and private companies “full access” to Venezuela’s oil industry. Stating that US Energy Secretary Chris Wright is responsible for the execution of the agreement, Trump added that the oil will be taken from ships and sent directly to US ports.
The Trump administration plans to control future sales of Venezuelan oil and use the proceeds to rebuild the country’s economy, Wright said Wednesday. “If we control the flow of oil and the cash flow from those sales, we have great leverage,” he said at the Goldman Sachs energy conference in Miami. “We need control of oil sales to drive the changes that need to happen.”
The United States will take control of Venezuela’s crude oil days after an attack on Caracas on Saturday morning resulted in the capture of then-president Nicolás Maduro and Trump vowed that US companies would revive the country’s struggling oil industry.
US oil executives from Chevron, ConocoPhillips and ExxonMobil are expected to meet Trump at the White House on Friday to discuss plans to pour billions of dollars into industry in Venezuela.
Chevron was the only US oil company still operating in the country after the assets of ConocoPhillips and Exxon were nationalized by former president Hugo Chavez in the mid-2000s; it was a move that Trump described as “the greatest theft in American history.”
US oil majors have so far refused to publicly announce such investment plans, and there are doubts that major publicly traded companies would be willing to invest in a politically unstable region in an environment of falling global oil prices, without firm guarantees that their investments will be protected.
There are also doubts about whether Venezuela, which has the world’s largest crude oil reserves, can once again produce meaningful quantities after years of neglect and corruption that have caused production to fall from highs of 3.5 million barrels per day 25 years ago to around 1 million barrels per day, or less than 1% of the global market.
The billions of dollars of investment needed to restore Venezuela’s oil production to its peak in the late 1990s would require 15 years of work and up to $185 billion in capital expenditures to repair the country’s deteriorated infrastructure, according to an analysis by Rystad Energy, a global consultancy.
The US State Department was contacted for comment on the issue.
