Donald Trump has achieved what he set out to do. A military operation, 'Operation Absolute Resolve,' commenced on the night of January 2-3, leading to the arrest of Venezuelan President Nicolás Maduro and his wife, Cilia Flores, initiating changes in Venezuela. Post-operation, Trump announced his control over the Venezuelan oil sector, sparking movements in the global energy sector.
The impact on crude oil prices has been noticeable. President Trump declared that the interim Venezuelan government will send millions of barrels to the U.S., to be sold internationally. The pressing question now is: What price will China, previously a major buyer of affordably priced Venezuelan oil, pay?
Donald Trump Makes a Major Announcement
Trump's strategy concerning Venezuelan oil has begun, with an important announcement via his Truth Social account. He shared, 'Venezuela’s interim government will provide 30-50 million barrels of sanctioned, high-quality oil to the United States.’ He emphasized that this substantial volume will be shipped directly to unloading docks in America.
Trump States Full Control Over Oil Revenue
In a bold statement, Trump mentioned that the incoming 30-50 million barrels of crude oil from Venezuela will be sold at market prices. He made it clear that he will have full control over the revenues generated, ensuring its benefit for both Venezuelans and Americans.
Source: aajtak
Trump stated, 'The revenue generated from selling oil at market prices will be under my control as the President of the United States, making sure it is used for the welfare of both Venezuelan and American citizens.' Furthermore, he instructed Energy Secretary Chris Wright to execute this plan immediately.
Discussions Start on Oil Exports
Reports by Reuters indicate ongoing discussions between Venezuelan and U.S. officials regarding the export of Venezuelan crude oil to the U.S. Insights from five governmental and industry sources reveal a possible visit by CEOs of U.S. oil companies to the White House to discuss Venezuela by Thursday. However, the specifics about the meeting with Trump are still under negotiation.
China's Concerns Intensify
President Trump's plan to sell Venezuelan oil at market prices raises significant queries about China's future purchase strategy. Despite American sanctions, China has maintained importation of Venezuelan oil at favorable rates. From 2020 to 2023, Venezuela's oil exports to China came with a 20–25% discount compared to market rates. However, post sanctions, with fewer buyers, China had the upper hand in obtaining oil at discounted rates. But, in 2024-25, these discounts were slightly reduced to $10-18 per barrel. As Trump gains control over the oil sector, China might face a downturn in its privileged position.
