Venezuela to Export Up to $2 Bn in Oil to U.S.

Venezuela will export up to $2 bn worth of crude oil to the United States, President Donald Trump announced Tuesday. The deal is intended to redirect shipments from China while helping Caracas maintain production levels amid U.S. sanctions.

Trump said the move signals that Venezuela’s interim President Delcy Rodriguez is complying with his demand to open the nation’s oil industry to U.S. companies. The South American country currently has millions of barrels stuck on tankers and in storage due to a blockade imposed by Washington in mid-December.

Chevron to manage exports

The U.S. Energy Secretary Chris Wright will oversee the execution of the deal, which will see Venezuelan oil sent directly to American ports. Chevron, PDVSA’s main U.S. partner, has been the sole exporter of Venezuelan crude under the recent blockade, shipping between 100,000 and 150,000 barrels per day.

Trump indicated that Venezuela will provide between 30 mln and 50 mln barrels of sanctioned oil, with proceeds controlled by the U.S. to «benefit the people of Venezuela and the United States.» The oil is priced at around $22 per barrel below Brent, giving a total value near $1.9 bn.

Possible auctions and licences for U.S. buyers

Officials have discussed sales mechanisms, including auctions allowing U.S. buyers to bid on cargoes and issuing licences to PDVSA partners such as Chevron, Reliance, CNPC, Eni, and Repsol. These arrangements could enable exports while maintaining U.S. oversight of the transactions. There are also talks about potentially storing Venezuelan oil in the U.S. Strategic Petroleum Reserve in the future.

U.S. officials hail the deal

Interior Secretary Doug Burgum described the increased Venezuelan oil flow as «great news» for U.S. jobs, gasoline prices, and Venezuela’s economy. He said American technology and partnerships could help Venezuela rebuild its industry. U.S. Gulf Coast refineries, which process heavy crude grades, were importing around 500,000 barrels per day before the sanctions were imposed.

Traders responded to the announcement with small declines in U.S. Gulf heavy crude differentials, reflecting expectations of higher Venezuelan supplies.

Kursiv also reports that ousted Venezuelan President Nicolas Maduro pleaded not guilty on Monday to U.S. narcotics charges.