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Venezuela and the United States have finalized an agreement allowing the export of up to $2 billion worth of Venezuelan crude oil to the U.S., announced President Donald Trump on Tuesday. This move aims to redirect supplies from China and help Venezuela avoid further reductions in its oil output.
The deal signals that the Venezuelan government is responding to Trump’s demand for increased cooperation with U.S. oil companies, or face deeper intervention measures. Trump has stated he wants interim President Delcy Rodriguez to grant U.S. and private enterprises full access to Venezuela’s oil industry.
Venezuela currently has millions of barrels of oil loaded on tankers and stored in tanks, unable to be shipped due to a U.S. export blockade imposed since mid-December. This blockade is part of increased pressure on President Nicolás Maduro’s government, which escalated last weekend when U.S. forces detained Maduro. Venezuelan officials have labeled Maduro’s detention a kidnapping and accused the U.S. of attempting to seize the nation’s significant oil reserves.
Trump indicated that Venezuela will transfer between 30 and 50 million barrels of “sanctioned oil” to the U.S., stating on social media that the oil will be sold at market price, with the proceeds controlled by him to benefit both the Venezuelan and American people.
U.S. Energy Secretary Chris Wright is tasked with implementing this agreement, with plans to transfer the oil directly from ships to U.S. ports. To supply this trapped crude, ships initially might be redirected from China, which has been Venezuela’s primary buyer for the past decade, especially since U.S. sanctions on Venezuelan oil trade were imposed in 2020.
An industry source mentioned that Trump aims to make this happen soon to proclaim it as a major victory. Venezuelan government officials and PDVSA, the state oil company, did not comment on the deal.
Following the announcement, U.S. crude prices dropped over 1.5%, with expectations that Venezuelan oil exports to the U.S. will increase. Currently, Chevron is the sole company authorized to export Venezuelan crude without interruption from the country, exporting between 100,000 and 150,000 barrels daily.
It remains unclear whether Venezuela will have access to the proceeds from these sales, as sanctions continue to freeze PDVSA’s bank accounts and exclude it from global financial systems. Venezuela’s flagship crude, Merey, is currently trading around $22 below Brent per barrel, indicating a potential deal value of up to $1.9 billion. Interim President Rodriguez, recently sworn in, is also under U.S. sanctions since 2018 for undermining democracy.
Discussions between Venezuelan and U.S. officials this week included potential sale mechanisms, such as auctions allowing U.S. buyers to bid on cargoes, and the issuance of U.S. licenses to PDVSA’s partners to facilitate supply contracts. Past licenses have enabled some of these companies—Chevron, Reliance (India), China National Petroleum, Eni, and Repsol—to access Venezuelan oil for refining or resale.
Preparations hint at a resumed flow of Venezuelan cargoes to the U.S., with some traders adjusting their bids due to anticipated increased supply. The prospect of larger Venezuelan oil imports is viewed positively for U.S. refiners along the Gulf Coast, which are capable of processing heavy Venezuelan crude. However, without export pathways, Venezuela’s oil production may need to decrease further as storage fills up.
Prices for Venezuelan heavy oil grades in the U.S. Gulf have dipped slightly amid the increased supply expectations.
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