- US needs to control oil sales in Venezuela, says Energy Sec Wright.
- Controlling Venezuela’s oil meant controlling the country: US VP Vance.
- Democrats criticize the Trump administration’s strategy as akin to stealing oil.
The United States needs to control Venezuela’s oil sales and revenues indefinitely to stabilize the country’s economy, rebuild its oil sector and ensure it acts in US interests, top US officials said on Wednesday.
The comments reflect the importance of crude oil to President Donald Trump’s strategy in Venezuela after US forces ousted the country’s leader, Nicolas Maduro, in a raid on the capital, Caracas, on Saturday.
“We need to have that leverage and that control over these oil sales to drive the changes that simply need to happen in Venezuela,” US Energy Secretary Chris Wright said at the Goldman Sachs Energy, CleanTech & Utilities Conference in Miami.
He said the proceeds would be used to stabilize Venezuela’s economy and eventually repay oil majors Exxon Mobil and ConocoPhillips for losses when their assets were nationalized by former President Hugo Chavez nearly two decades ago.
US Vice President JD Vance said that control of Venezuela’s oil meant control of the country.
“We control the energy resources and we say to the regime, ‘You are allowed to sell the oil as long as you serve the national interest of the United States; you are not allowed to sell it if you cannot serve the national interest of the United States,'” he told Fox News’ “Jesse Watters Primetime” program.
“And that’s how we put incredible pressure on that country without wasting a single American life, without putting a single American citizen at risk,” he said.
Democratic lawmakers criticized the approach, which Connecticut Sen. Chris Murphy likened to stealing Venezuela’s oil at gunpoint, while industry analysts warned of political instability as the country walks a fine line between condemning Maduro’s capture and appeasing the United States.
The OPEC member nation sits atop the world’s largest oil reserves but accounts for only about 1% of global supply after decades of underinvestment eroded production.
Stored oil moves to the market first
Energy Secretary Wright said the U.S. would market stored Venezuelan oil first and then sell ongoing future production indefinitely, with proceeds deposited into accounts controlled by the U.S. government.
Such sales have already begun and the US has engaged “the world’s leading commodity marketers and key banks” to execute and provide financial support for them, according to a statement from the US Department of Energy.
Wright added that he was talking to U.S. oil companies to find out what conditions would allow them to enter Venezuela to help boost the country’s production in the long term.
“The resources are enormous. This should be a wealthy, prosperous, peaceful energy powerhouse,” he said.
On Tuesday, Washington announced a deal with Caracas to initially export up to $2 billion of Venezuelan crude to the United States, a sign that the government of interim Venezuelan President Delcy Rodriguez is responding to Trump’s demands to open up to American oil companies or risk more military intervention.
Trump said Wednesday in a post on Truth Social that Venezuela has agreed to use the proceeds from the sale of its oil to buy American-made goods.
“A wise choice, and a very good thing for the people of Venezuela and the United States,” he wrote.
Venezuela’s state-run oil company PDVSA said it was making progress in talks with the United States on oil sales. PDVSA board member Wills Rangel told Reuters The US will have to buy freight at fair market prices.
Shares in US refiners Marathon Petroleum, Phillips 66 and Valero Energy rose between 2.5% and 5%.
Meetings at the White House
Trump is scheduled to meet with the heads of major oil companies at the White House on Friday to discuss ways to increase Venezuela’s oil production.
Representatives from Exxon Mobil, ConocoPhillips and Chevron – the top three US oil companies – would be in attendance, according to a source familiar with the planning.
Chevron Vice Chairman Mark Nelson will represent the company at the meeting, another source said.
The companies, all of which have experience in Venezuela, declined to comment.
Wright said in an interview with CNBC on Wednesday afternoon that he spoke with the CEOs of all three companies immediately after Maduro was seized and expected them to be committed to rehabilitating Venezuela’s oil sector.
“Are they going to spend billions of dollars building new infrastructure in Venezuela next week? Of course not,” he said. “But they want to be productive advisors and helpers in that process.”
Wright also told CNBC that some of the revenue from Venezuelan oil sales could eventually be used to repay ConocoPhillips and Exxon Mobil for losses when they left the country, but only after Venezuela’s economy stabilizes.
Chevron is the only US oil major still operating in Venezuela’s oil fields.
Venezuela produced as much as 3.5 million barrels per day in the 1970s. But mismanagement and limited foreign investment have since led to a sharp decline in annual production, which averaged about 1.1 million bpd last year.
Wright said he believed Venezuelan production could be boosted within a short period with an infusion of equipment and technology, but that a broader recovery to previous production levels would take years.
