US says it will control Venezuela oil sales 'indefinitely'
What's the story
The United States will take charge of the sales of sanctioned Venezuelan oil "indefinitely," a White House official has confirmed. The move comes as part of plans to ease restrictions on Venezuelan crude in global markets. "We need to have that leverage and control of those oil sales to drive the changes that simply must happen in Venezuela," Energy Secretary Chris Wright said.
Marketing efforts
US plans to market Venezuelan oil
The White House has already begun marketing the Venezuelan oil and is working with major banks and commodity companies to finalize the sales. The initial sales are expected to be between 30 million and 50 million barrels of oil. The revenue from these sales, estimated at $2.8 billion, will be controlled by the US government to maintain influence over Venezuela's government. It is, however, unclear what portion of the revenues from the sale would be shared with Venezuela.
Negotiation status
Venezuela's state-run oil company responds to negotiations
White House press secretary Karoline Leavitt said the two sides had struck a deal. But Venezuela's state-run oil company PDVSA said negotiations were still ongoing within the existing framework between the two countries. The company said, "This process is based on similar rules to those in force with international companies." The statements come after Donald Trump said Venezuela would be "turning over" up to 50 million barrels of oil to the US, which would be sold at its market price.
Revenue distribution
US Secretary of State's remarks on oil revenue
As part of the strategy, the US intends to "selectively" ease the sanctions that have restricted Venezuelan crude sales for decades. "We're just going to get that crude moving again and sell it," Wright said. "We're going to market the crude coming out of Venezuela—first this backed-up stored oil and then indefinitely going forward we will sell the production that comes out of Venezuela." He also insisted that "we are not stealing anyone's oil."
Controversial move
Criticism and potential impact of US controlling Venezuela's oil
US Secretary of State Marco Rubio emphasized that the aim is to distribute the money "in a way that benefits the Venezuelan people - not corruption, not the regime." The plan has been criticized by Democrats, with Senator Chris Murphy calling it "insane." He said, "They are talking about stealing the Venezuelan oil at gunpoint for a period of time undefined as leverage to micromanage the country."
Oil
Venezuela has some of world's largest proven oil reserves
Venezuela possesses some of the planet's largest proven oil reserves. Yet, a combination of years spent neglecting investment, poor management, and US sanctions has reduced its output to roughly a million barrels daily. That's less than 1% of the world's total production. Per BBC, China received the majority of that supply in recent years. However, this has been hampered in recent months after the US's strikes and blockade of Venezuelan vessels as part of its pressure campaign against Nicolas Maduro.