U.S. Sells Venezuelan Crude at Higher Prices
The U.S. has finalized an initial $500 million sale of Venezuelan crude, achieving prices about 30% above what they were just a few weeks ago, according to the Department of Energy.
This development followed the dramatic arrest of Venezuelan leader Nicolás Maduro and his wife on January 3, facing serious charges, including conspiracy related to drug terrorism.
“If you sell the same barrel of oil now, you’re looking at a price that’s roughly 30% higher than it was three weeks back,” Energy Secretary Chris Wright remarked during a briefing. It’s an interesting shift, to say the least.
The Department of Energy didn’t respond promptly to requests for further comment.
Last week, President Trump announced that Venezuela is set to sell between 30 million and 50 million barrels of oil to the U.S. at “market prices.” The Energy Department indicated that sales from Venezuela will continue indefinitely.
Trump has suggested he will control how Venezuela utilizes the profits, aiming to ensure benefits for both countries. Moreover, he mentioned that an investment of at least $100 billion is expected in Venezuela’s energy sector, with plans to “clean out the old junk.”
Venezuela is known for having the largest oil reserves in the world, with around 303 billion barrels. However, its production has drastically fallen—from about 3.5 million barrels per day in the 1990s down to just 800,000 barrels daily.
Since Maduro’s arrest, conversations have taken place at the White House involving top leaders from companies like Exxon, Chevron, ConocoPhillips, Halliburton, Valero, and Marathon, discussing potential investments in Venezuelan oil.
It’s worth noting that Exxon and ConocoPhillips exited Venezuela around two decades ago when Maduro’s predecessor, Hugo Chávez, nationalized their assets. They are now owed roughly $12 billion related to an arbitration case, according to JPMorgan.
Prior to these events, Chevron was the only major U.S. oil company still operating in Venezuela.
Mark Malek, chief investment officer at Sievert Financial, stated that “major U.S. firms with experience in complex and politically sensitive environments stand to gain the most” due to the recent changes in Venezuela.
Chevron, in particular, has a history of working with Venezuela, along with the technical expertise in heavy oil to manage operations in such turbulent areas. ExxonMobil also fits into this category, especially considering the capital-intensive and long-term nature of redevelopment.
“ConocoPhillips, known for its operational discipline and experience in heavy oil, may benefit as well if production becomes more stable,” Malek noted.
On the market side, Brent crude rose by $0.50 to $64.26 a barrel, marking its fourth consecutive week of increases. Meanwhile, U.S. West Texas Intermediate climbed by $0.48 to $59.67.
Both benchmarks reached multi-month highs this week, though analysts have cautioned that volatility could rise amid escalating protests in Iran and concerns about potential supply disruptions.
