US Officials Discuss Venezuela’s Oil Industry

An unnamed US official told Reuters that while the US’s involvement in Venezuela’s oil sector won’t stop China from buying oil from there, it will no longer benefit from the “unfair and undervalued” prices that have prevailed.

Earlier this month, President Trump revealed plans for US oil experts to collaborate with Venezuela’s socialist government. This move follows the arrest of former dictator Nicolás Maduro. He authorized a Delta Force mission to capture Maduro and his wife, Cilia Flores, who face multiple drug trafficking charges. The operation reportedly incurred no significant losses for the US, while over 30 Cuban security personnel were killed defending Maduro in Caracas.

After Maduro’s arrest, his vice president, Delcy Rodríguez, took control and expressed willingness to work with the US. Interestingly, President Trump referred to Rodríguez, known for her hardline Marxist views, as “amazing,” claiming to be in regular contact with Secretary of State Marco Rubio. He even joked in a tweet about being Venezuela’s “acting” president.

The fall of Maduro could be a major blow to China, which has supported his government for years. The financial strain for China originates from a 2018 agreement where they provided Maduro with a $5 billion loan, seemingly to be repaid in oil. Following sanctions imposed by the Trump administration on Venezuela’s state oil company, shipments of Venezuelan crude to China reportedly increased, limiting options for other countries wishing to engage with Maduro’s regime.

Oil analysts believe that Maduro’s arrest could complicate China’s situation in Venezuela. While early reports suggested that China might turn to Iran for oil supplies, this notion became less appealing after new sanctions against Iran were announced due to its repression of peaceful protests.

The official relayed to Reuters that while China still has the option to buy Venezuelan oil, the once nearly free oil linked to the 2018 loan can’t be relied upon anymore.

As the official stated, “Thanks to President Trump’s strong enforcement actions, Venezuelans can expect fair oil prices from China and other nations, rather than being subjected to corrupt, low prices.” Trump has urged Venezuela to sell most of its oil to the US, promising support to upgrade the underperforming state oil company, PDVSA. Venezuela’s oil production has plummeted after the departure of many skilled workers, leading to fuel shortages in a nation rich in oil resources.

President Trump also announced that the US would begin extensive drilling in Venezuela soon. “We’re going to start drilling shortly. We’ve got the largest companies on board, and negotiations are underway,” he shared with reporters at the World Economic Forum in Davos, Switzerland. “The public is really excited about this. They’ll be getting better financial returns, and so will we.”

The Chinese Foreign Ministry briefly commented on the reports, affirming that while the US wouldn’t stop China from buying Venezuelan oil, it would call for fair pricing. According to spokesperson Guo Jiakun, “Venezuela is a sovereign nation with the right to choose its partners.” China has been a close ally of Maduro, with his last public appearance before his arrest being a meeting with Chinese officials.

Rodríguez met with Chinese representatives shortly after Maduro’s arrest, aiming to reassure them of continued collaboration. She expressed gratitude for China’s support and condemnation of Maduro’s capture via social media.

Despite China’s vocal criticism of Maduro’s arrest, no substantial measures have been reported to assist the remnants of his regime. Reports hint that China is urging Rodríguez to address Venezuela’s debt, estimated to be around $20 billion, although the government is trying to keep the precise figures hidden from the public.