The United States has announced plans to indefinitely control Venezuela’s oil sales and use the proceeds to benefit the Venezuelan people. This move comes after the US military captured Venezuelan President Nicolás Maduro and seized a Russian-flagged oil tanker linked to the South American country.
According to US Energy Secretary Chris Wright, the White House intends to first sell off a backlog of Venezuelan crude oil stored in tankers and facilities, worth an estimated $3 billion. Going forward, the US will retain control over all future crude production from Venezuela’s vast oil reserves, with the aim of using the revenue to support the Venezuelan people.
The oil grab has raised concerns about potential disruption to Venezuela’s oil exports to China, which currently takes around 80% of the country’s crude output. Beijing has criticised the US move, stating that it violates international law and infringes on Venezuela’s sovereignty.
The US administration’s actions have also sparked fears of confrontation with Russia, as the seized Russian-flagged tanker, the Marinera, was reportedly part of a shadow fleet moving oil for Russia, Iran and Venezuela. A second tanker, the Sophia, was later seized in the Caribbean.
Despite the US’s plans to revive Venezuela’s struggling oil industry, there are doubts about the country’s ability to significantly boost production. Years of neglect and corruption have seen output plummet from a high of 3.5 million barrels per day 25 years ago to around 1 million barrels per day currently – less than 1% of the global market.
Analysts estimate that the multibillion-dollar investment needed to restore Venezuela’s oil production to its former levels could take up to 15 years, with capital spending of up to $185 billion required to repair the country’s degraded infrastructure.
The US’s move to control Venezuela’s oil exports is likely to have far-reaching implications, both geopolitically and for the global energy market. As the situation continues to unfold, the impact on oil prices and international relations will be closely watched.
