U.S. Engages Commodity Traders for Venezuelan Oil Talks
LONDON/NEW YORK, Jan 8 – The administration of U.S. President Donald Trump recently extended an invitation to leaders of commodity trading firms Vitol and Trafigura for discussions at the White House regarding the marketing of Venezuelan oil, according to sources who are familiar with the situation.
European trading firms have long played a significant role in the global oil market and could assist the U.S. in selling Venezuelan oil, although the government prefers that major American companies take the lead in this effort.
Vitol, based in Geneva, has reportedly received preliminary approval from U.S. authorities to start discussions for an 18-month period regarding the import and export of oil from Venezuela, as per sources informed about the matter. Interestingly, while the White House had announced plans to invite U.S. oil majors, the inclusion of trading companies was not previously noted.
The list of attendees for the meeting has not been disclosed yet, and both Vitol and Trafigura, which is now headquartered in Singapore, declined to provide comment. Additionally, there was no response from the White House about whether these companies were invited.
U.S. Control Over Oil Sales
Following the military capture of Venezuelan President Nicolas Maduro on January 3, the Trump administration has focused on Venezuela’s oil industry, expressing a desire to maintain control over the country’s oil sales and proceeds for an indefinite period.
The U.S. Department of Energy recently announced its collaboration with commodity marketers and banks to facilitate the sale of Venezuelan crude oil, though it did not specify which companies are involved. President Trump has indicated a commitment from U.S. companies to invest in Venezuela and revitalize its oil production to help reduce global energy costs.
Moreover, the U.S. and Caracas have reportedly reached an agreement for the export of about 30 to 50 million barrels of oil valued at $2 billion to the United States. However, U.S. oil companies are insisting on “significant guarantees” before moving forward with their investments.
Years of underfunding and sanctions have led to a significant drop in Venezuelan oil output, decreasing from 3.5 million barrels per day in the 1970s—accounting for 7% of global oil production—to about 1 million barrels daily, which now makes up roughly 1% of the global supply.
Venezuela Engagement History
Before the U.S. sanctions in 2019, Vitol and Trafigura were among the most active traders of Venezuelan oil. They previously traded Venezuelan crude sourced from European partners of the state-owned company PDVSA, which has U.S. licenses. Their ability to quickly mobilize tanker fleets in Venezuela and trade oil barrels often surpassed that of various joint venture partners, although initially accessing Venezuelan oil may not be feasible.
“Large U.S. companies are at the forefront of oil production, but major international trading companies bring a breadth of options and global connections that big corporations might lack. So, it makes sense for these traders to engage with the U.S. government regarding the next steps,” remarked Jean-François Lambert from Lambert Commodities.
Furthermore, Chevron, a major U.S. oil company, is currently in discussions with the government to expand its operating license in Venezuela, aiming to sell to additional buyers and boost exports to its refineries. Other significant players, such as India’s Reliance, Italy’s Eni, Spain’s Repsol, France’s Morel & Prom, and China’s CNPC, have also been notable traders in Venezuelan oil under U.S. licenses since the sanctions were imposed in 2019.
