Trump says he wants to free up Venezuelan oil flow. What was blocking it?

Trump and Rubio say they want to use the oil to help Venezuelans. That’s not what the US track record shows.

United States President Donald Trump and Secretary of State Marco Rubio say they want to free up the flow of Venezuelan oil to benefit Venezuelans after US forces abducted President Nicolas Maduro from Caracas.

“We’re going to rebuild the oil infrastructure, which requires billions of dollars that will be paid for by the oil companies directly,” Trump said at a media briefing at his Mar-a-Lago estate in Florida hours after Maduro was seized on Saturday. “They will be reimbursed for what they’re doing, but it’s going to be paid, and we’re going to get the oil flowing.”

Then, on Tuesday, the US president said he wanted to use proceeds from the sale of Venezuelan oil “to benefit the people of Venezuela and the United States”. Rubio has echoed Trump in his comments in recent days.

But what has been holding back the flow of Venezuelan oil, preventing the country from attracting investments and driving the country into poverty?

A key reason is one that Trump and Rubio have been silent about: Washington’s own efforts to strangle Venezuela’s oil industry and economy through sanctions, which also have set off a refugee crisis.

In a post on his Truth Social platform on Tuesday night, Trump said Venezuela will turn over 30 million to 50 million barrels of sanctioned oil to the US.

Trump wrote: “This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!”

Trump added that he had directed his energy secretary, Chris Wright, to execute the plan “immediately”.

Earlier Trump had accused Venezuela in a Truth Social post of “stealing” US oil, land and other assets and using that oil to fund crime, “terrorism” and human trafficking. Top Trump adviser Stephen Miller has made similar claims in recent days.

Oil is trading at roughly $56 per barrel.

Based on this price, 30 million barrels of oil would be worth $1.68bn and 50 million barrels of oil would be worth $2.8bn.

“Trump’s statement about oil in Venezuela is beyond an act of war; it is an act of colonisation. That is also illegal based on the UN Charter,” Vijay Prashad, the director of the Tricontinental Institute for Social Research based in Argentina, Brazil, India, and South Africa, told media.

Ilias Bantekas, a professor of transnational law at Hamad Bin Khalifa University in Qatar, told media that the US involvement in Venezuela was “less about Maduro as it is about access to Venezuela’s oil deposits”.

What has Trump said about Venezuelan oil?

“This [oil] is the number one target. Trump is not content with just allowing US oil firms to get concessions but to ‘run’ the country, which entails absolute and indefinite control over Venezuela’s resources.”

According to the website of the US Energy Information Administration, the US consumed an average of 20.25 million barrels of petroleum per day in 2023.

Rubio said in the interview that since 2014, about eight million Venezuelans have fled the country, which he attributed to theft and corruption by Maduro and his allies. According to a report by the Office of the UN High Commissioner for Refugees from May, nearly 7.9 million people have indeed left Venezuela.

But he was silent on the US’s own role in creating that crisis.

Venezuela nationalised its oil industry in 1976 under then-President Carlos Andres Perez during an oil boom. He established the state-owned Petroleos de Venezuela SA (PDVSA) to control all oil resources.

Venezuela continued to be a major oil exporter to the US for some years, supplying 1.5 million to 2 million barrels per day in the late 1990s and early 2000s.

After President Hugo Chavez took office in 1998, he nationalised all oil assets, seized foreign-owned assets, restructured the PDVSA and prioritised using oil revenue for social programmes in Venezuela.

From 2003 to 2007, Venezuela under Chavez managed to cut its poverty rate in half – from 57 percent to 27.5 percent. Extreme poverty fell even more sharply, by 70 percent.

But exports declined, and government authorities were accused of mismanagement.

The US first imposed sanctions on Venezuela’s oil in retaliation for nationalising US oil assets in 2005.

Under US sanctions, many senior Venezuelan government officials and companies have been barred from accessing any property or financial assets held in the US. They cannot access US bank accounts, sell property or access their money if it passes through the US financial system.

Critically, any US companies or citizens doing business with any sanctioned individual or company will be penalised and risk becoming subject to enforcement actions.

Maduro took over as president in 2013 after Chavez’s death. In 2017, Trump, during his first term in office, imposed more sanctions and tightened them again in 2019. This further restricted sales to the US and access for Venezuelan companies to the global financial system. As a result, oil exports to the US nearly stopped, and Venezuela shifted its trade mainly to China with some sales to India and Cuba.