US sets out bare-bones plan to control Venezuela’s oil sales

Trump administration officials Wednesday outlined a sweeping albeit bare-bones plan to effectively assume control of selling oil from Venezuela indefinitely.

The details emerged throughout the day, as Cabinet officials sought to fill in the gaps of what President Donald Trump had sketched out on social media, where he announced late Tuesday that Venezuela would soon hand over tens of millions of barrels of oil to the United States.

The plan was as audacious as it was spare. No American government in recent memory has tried to exert such complete control over another country’s oil exports on its own. An oil-for-food program once oversaw the use of funds from Iraqi oil sales, but it was managed by the United Nations.

Venezuela’s state oil company released a statement Wednesday afternoon confirming that negotiations were underway with the U.S. government but stopped short of saying a deal was in place. Venezuelans are deeply protective of their country’s natural resources. Maintaining control over oil while limiting the influence of foreign governments and companies has been a central plank for the leftists who have governed the country since Hugo Chávez, who emulated Fidel Castro, became president in 1999.

“We are in the midst right now and in fact about to execute on a deal to take all the oil,” Secretary of State Marco Rubio said Wednesday at the Capitol.

Earlier in the day, Trump’s energy secretary, Chris Wright, said the United States intended to maintain significant control over Venezuela’s oil industry, including by overseeing the sale of the country’s production “indefinitely.”

“Going forward we will sell the production that comes out of Venezuela into the marketplace,” Wright said at a Goldman Sachs energy conference near Miami.

In his remarks, Rubio insisted to reporters that the administration was “not just winging it.” Not only would the United States seize and sell up to two months’ worth of Venezuela’s daily production, it would seek to ensure that Western oil companies “have access to the Venezuelan market in a way that’s fair,” he said.

The Energy Department also said in a fact sheet published Wednesday that the administration would roll back sanctions “selectively” to facilitate the sale of Venezuela’s oil. The department went on to say that it had already begun marketing the oil with the help of commodity traders and banks.

The Trump administration’s plans amount to a sharp reversal in U.S. policy on Venezuela. The South American nation’s oil production and exports have been severely restricted since 2019, when Trump placed tough sanctions on the country, including on Venezuela’s state-owned oil company.

More recently, the United States has imposed a partial blockade designed to prevent many tankers from leaving Venezuela with oil. That has choked a vital source of revenue for the country’s government and forced it to keep oil in storage tanks and ships floating off the coast.

Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University, described the arrangement laid out by U.S. officials as “reminiscent of a much earlier era of concessions and imperialist control.”

“If the only way for a country to access the global market to sell its oil and get around U.S. pressure economically and militarily is to let the U.S. run its oil industry and capture a very large share of the wealth created, that is unprecedented in recent oil market history,” Bordoff said.

The closest analogue in Venezuelan history for such a proposal dates to the 19th century when Venezuela was a Spanish colony and was forced to export all its goods through imperial authorities. That exploitative system helped trigger an uprising that led to the country’s independence.

It was unclear what legal authority the administration would rely on to commandeer the oil money to use as it saw fit nor was it apparent what exactly had been agreed. The Constitution gives Congress control over government expenditures, barring any money from being spent except as appropriated by legislation.

Even the exact status of the agreement was unclear. While Rubio said a deal was close to being reached, a White House spokesperson, Taylor Rogers, said the two sides had already struck an agreement.

Later Wednesday, Venezuela’s state-owned oil company, Petróleos de Venezuela, released a statement saying negotiations were taking place “under frameworks similar to those currently in effect with international companies.”

But neither the company nor Venezuela’s government, which is being led by Delcy Rodríguez since U.S. forces seized President Nicolás Maduro over the weekend, has confirmed the details offered by Trump officials. It is not clear, for example, whether Venezuela intends to let Washington control proceeds from oil sales as Trump administration officials have claimed.

Even if the two sides reach a deal, it is likely to violate international law, said Allen S. Weiner, director of the Stanford Program in International and Comparative Law.

“If you enter an agreement because you’ve been coerced by force, that’s illegitimate,” Weiner said. But, he added, the prospects for enforcing that law are limited, at least in the near term.

Trump has a history of preemptively announcing deals with foreign countries that other governments have not yet fully agreed to or which have subsequently fallen through. Countries like Vietnam and Japan have privately balked at trade terms the president publicly announced last year, though both countries ultimately agreed to trade deals with the United States. Both Britain and the European Union have been sparring with the Trump administration over the terms of trade deals that were announced last year.

Wright said the Trump administration was in “active dialogue” with Venezuela’s leadership as well as U.S. oil giants that have operated in the country. Executives from some of the largest Western oil producers are expecting to meet Trump at the White House on Friday afternoon, according to people familiar with the plans.

“We need to have that leverage and that control of those oil sales to drive the changes that simply must happen in Venezuela,” said Wright, a former oil industry executive. He added that the money “can flow back into Venezuela to benefit the Venezuelan people.”

Democratic lawmakers expressed deep skepticism about the administration’s plans. “It is not clear what comes next,” Rep. Nancy Pelosi, the former speaker of the House, said while leaving a briefing with Rubio and other administration officials.

Many Western oil companies abandoned operations in Venezuela over the last two decades. The opportunity there is large given the country’s vast oil reserves, but returning is politically risky and likely to come down to the terms of investment. Chevron is the only large U.S. oil company to have continued producing oil in the country.

The Trump administration is acting to bring more of Venezuela’s crude to market as the world is dealing with an oversupply that has weighed on prices. The U.S. benchmark oil price was down more than 1% Wednesday, trading near $56 a barrel, close to its lowest level in five years.

Wright echoed outside estimates forecasting that Venezuela could potentially boost oil production by several hundred thousand barrels per day relatively quickly. But more substantial increases above current output levels of around 1 million barrels per day would take much longer, even if international oil companies were ready to invest more money in the country.

“To get back to the historical production numbers, that takes tens of billions of dollars and significant time,” Wright said. “But why not?”