Washington/Houston Venezuela and the United States have reached a significant agreement under which Caracas will export up to $2 billion worth of crude oil to the US, marking a major shift in Washington’s sanctions-driven energy strategy and redirecting Venezuelan oil supplies away from China.
US President Donald Trump announced that Venezuela would supply between 30 million and 50 million barrels of sanctioned oil to the United States. According to Trump, the oil will be sold at market prices, with revenues to be overseen by the US administration to ensure they benefit both Venezuelan and American interests.
The deal comes amid heightened political tensions following the US-led capture of Venezuelan President Nicolás Maduro, an action Caracas has described as a “kidnapping” and part of a broader attempt by Washington to seize control of Venezuela’s vast oil reserves. Venezuela has been unable to export millions of barrels of crude currently stored in tankers and terminals due to a US-imposed export blockade introduced in mid-December.
Shift Away from China, Relief for Venezuelan Output
The agreement is expected to divert oil shipments originally destined for China, Venezuela’s largest crude buyer over the past decade. Industry sources say redirecting these cargoes to the US will help Venezuela avoid deeper production cuts, as state oil company PDVSA is running out of storage capacity.
Venezuela’s flagship heavy crude grade, Merey, has recently been trading at a steep discount—around $22 per barrel below Brent—putting the total value of the deal at approximately $1.9 billion.
Chevron’s Central Role
Currently, Chevron is the only US company authorized to export Venezuelan oil under existing US licenses. The company has been shipping between 100,000 and 150,000 barrels per day to the US and is expected to remain a key player as oil flows increase. It remains unclear whether PDVSA will gain direct access to proceeds, as US sanctions continue to restrict its access to the global financial system.
Broader Energy and Economic Implications
US officials say increased Venezuelan oil supplies could benefit US Gulf Coast refineries, many of which are equipped to process heavy crude. Prior to sanctions, these refineries imported up to 500,000 barrels per day from Venezuela.
US Interior Secretary Doug Burgum described the potential rise in Venezuelan oil flows as “great news” for US jobs, fuel prices, and Venezuela’s economic recovery. He emphasized that American technology and investment could help rebuild the South American nation’s energy sector.
Discussions between the two countries have also included possible auctions for US buyers, expanded licenses for PDVSA partners, and even the future use of Venezuelan oil in the US Strategic Petroleum Reserve, though no formal decision has been announced.
Market Reaction
Following Trump’s announcement, US crude prices fell over 1.5%, while heavy crude differentials in the US Gulf Coast softened on expectations of increased Venezuelan supply.
The deal signals a major geopolitical and energy realignment, with Washington leveraging oil exports as both an economic tool and a strategic instrument in its evolving relationship with Venezuela.