KEY POINTS
- Venezuela plans up to $2 billion in oil exports to the US.
- Cargoes would be diverted from China under the deal.
- Chevron remains central to Venezuelan oil shipments.
Venezuela and the United States have reached an agreement that would allow up to $2 billion worth of Venezuelan crude oil to be exported to the US, President Donald Trump said on Tuesday, signaling a sharp shift in oil flows and a partial easing of pressure on Caracas after weeks of tightened restrictions.
Trump described the arrangement as a negotiated outcome that would redirect supplies away from China while helping Venezuela avoid deeper production cuts. In a post on social media, he said Venezuela would “turn over” between 30 million and 50 million barrels of oil that had been blocked by US sanctions, adding that the crude would be sold at market prices and shipped directly to US ports.
The announcement follows a mid-December export blockade imposed by Washington that left millions of barrels of Venezuelan oil stranded on tankers and in storage. The restrictions were part of a broader escalation in US pressure on President Nicolas Maduro’s government, which culminated in US forces capturing Maduro over the weekend. Venezuelan officials have described the move as a kidnapping and accused Washington of seeking control over the country’s oil reserves.
Oil flows redirected to US
Trump said Energy Secretary Chris Wright would oversee execution of the agreement. The oil is expected to be taken from vessels already holding sanctioned cargoes and delivered to US refiners. Two sources told Reuters earlier that reallocating shipments originally bound for China would likely be required to supply the US market in the initial phase.
China has been Venezuela’s largest oil buyer over the past decade, particularly since US sanctions in 2020 limited Caracas’ access to Western markets. One oil industry source said Trump wanted the arrangement completed quickly so it could be presented as a political and economic win.
Venezuelan officials and state oil company PDVSA declined to comment. PDVSA has been running out of storage capacity under the export blockade and has already been forced to curb output. Without a near-term outlet for crude, further production cuts would be likely, one source said.
Chevron controls shipments
According to Reuters, US crude prices fell more than 1.5 percent following Trump’s announcement, reflecting expectations of increased Venezuelan supply. Shipments of Venezuelan oil to the US are currently controlled by Chevron, PDVSA’s main joint venture partner, operating under a US authorisation.
Chevron has continued exporting between 100,000 and 150,000 barrels per day despite the blockade and remains the only company loading Venezuelan crude without interruption. It was not immediately clear whether Venezuela would have access to the proceeds from the sales. Sanctions exclude PDVSA from the global financial system, freeze its accounts and block transactions in US dollars.
Venezuela has been selling its flagship Merey crude at a discount of about $22 per barrel to Brent, valuing the proposed exports at up to $1.9 billion. Interim President Delcy Rodriguez, sworn in on Monday, remains under US sanctions imposed in 2018.
US and Venezuelan officials have discussed possible auction mechanisms for US buyers and licenses for PDVSA partners, including Chevron, Eni, Repsol, Reliance and CNPC. Some companies have begun preparations to receive cargoes again, according to sources. Talks have also included the potential use of Venezuelan oil in the US Strategic Petroleum Reserve.
