Government officials in Caracas and Washington are discussing the possibility of exporting Venezuelan crude to refineries in the United States, five government, industry and transportation sources told Reuters on Tuesday, a deal that could divert supplies from China while helping state-owned PDVSA avoid deeper production cuts.
These talks are the first sign that the Venezuelan government is responding to President Donald Trump’s demand that they open up to U.S. oil companies or face more military intervention. Trump has said he wants interim President Delcy Rodríguez to grant “full access” to Venezuela’s oil industry to the U.S. and private companies.
Venezuela has millions of barrels of oil loaded in tanks and warehouses that it has not been able to ship due to an export blockade imposed by Trump since mid-December.
The blockade was part of increasing U.S. pressure on the government of Venezuelan President Nicolás Maduro, which culminated in Maduro’s capture by U.S. forces this weekend. Senior Venezuelan officials have called Maduro’s capture a kidnapping and accused the U.S. of trying to steal the country’s vast oil reserves.
A possible deal to sell trapped crude to the US could initially require the relocation of cargoes originally destined for China, two sources said. The Asian country has been Venezuela’s main buyer in the last decade, especially since the US imposed sanctions on companies involved in oil trade with Venezuela in 2020.
“Trump wants this to happen soon so he can call it a big victory,” said one of the oil industry sources.
The White House, Venezuelan government officials and PDVSA did not immediately comment.
Chevron will control Venezuelan oil flows to the US
The supply would increase the volume of Venezuelan oil exported to the US, a flow that is currently fully controlled by Chevron, PDVSA’s main joint venture partner, under a US authorization.
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Chevron, which has been exporting between 100,000 and 150,000 barrels per day (bpd) of Venezuelan oil to the US, is the only company that has been loading and shipping crude oil without interruption from Venezuela in recent weeks under the blockade.
It was not immediately clear how sanctioned PDVSA would receive the money from oil sales. The sanctions mean the company is excluded from the global financial system, its bank accounts are frozen and it is blocked from executing transactions in US dollars.
Rodríguez, who took over as interim president on Monday, is also under US sanctions imposed in 2018 for undermining democracy.
Talks include possible auctions with US buyers.
Officials have been in talks this week about possible sales mechanisms, including auctions to allow interested U.S. buyers to bid for the cargoes, and the issuance of U.S. licenses to PDVSA’s trading partners that could lead to supply contracts, two sources said.
Those licenses have in the past allowed PDVSA’s business partners and clients, including Chevron, India’s Reliance, China National Petroleum Corporation (CNPC) and Europe’s Eni and Repsol, to access Venezuelan oil for refining or resale to third parties.
This week, some of those companies have begun making preparations to receive Venezuelan shipments again, two sources said.
The US and Venezuela have also discussed whether Venezuelan oil could be used in the US Strategic Petroleum Reserve in the future, according to one of the sources.
An increase in oil flows would be ‘great news’
U.S. Secretary of the Interior Doug Burgum said Tuesday that an increase in the flow of Venezuelan heavy oil into the U.S. Gulf would be “great news” for job security, future U.S. gasoline prices and for Venezuela.
“Venezuela now has the opportunity to receive capital to rebuild its economy and take advantage of this opportunity,” he told Fox News, when asked about talks between the governments over oil exports. “With American technology and US partnership, Venezuela can be transformed.”
US refineries on the Gulf Coast can process Venezuela’s heavy crudes and were importing about 500,000 barrels per day (bpd) before Washington imposed energy sanctions on Venezuela.
PDVSA has already had to reduce its production due to the embargo, because it is running out of storage space for oil. If PDVSA does not find a way to export oil soon, it would have to reduce production further, one of the sources said.
Oil traders reacted to news of the talks on Tuesday. Spreads on some heavy oil grades in the US Gulf fell about 50 cents a barrel on Tuesday on the prospect of more Venezuelan supplies.
With information from Reuters
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