Trump says US to likely end oil purchases from Venezuela

January 22, 2025 TruthUSA

Secretary of State Marco Rubio has stated that Venezuela is currently ‘governed by a narco-trafficking organization.’

President Donald Trump announced on Jan. 20 that his administration is likely to cease purchasing oil from Venezuela.

“It was a great nation 20 years ago, and now it’s in a state of chaos,” Trump mentioned to reporters in the Oval Office shortly after his inauguration. “We don’t have to rely on their oil. We have more than enough oil for our own needs.”

On Monday, Trump outlined a strategy to optimize U.S. oil and gas production, which includes declaring a national energy emergency. He additionally signed an executive order withdrawing the United States from the Paris Climate Accord.

As of the end of 2023, Venezuela held the largest confirmed crude oil reserves globally, totaling over 300 billion barrels, according to OPEC.

In 2019, U.S. crude oil imports from Venezuela plunged when the United States imposed sanctions on Venezuelan state oil company Petróleos de Venezuela.

Additional sanctions enforced by the initial Trump administration in 2019 severely limited Venezuela’s oil sector. The Biden administration subsequently eased certain restrictions, keeping company-specific licenses that permitted entities like Chevron to operate under restricted circumstances in Venezuela.

In November 2022, the United States eased sanctions, granting waivers to Chevron by The Office of Foreign Assets Control, which enforces economic and trade sanctions.

In April 2024, the United States reinstated oil sanctions on Venezuela due to election-related concerns.

Venezuelan President Nicolás Maduro took the oath of office on Jan. 10 following a controversial election.

Opposition leader María Corina Machado labeled Maduro’s inauguration as a “coup d’état” and a breach of the country’s constitution.

The Chinese Communist Party has expressed support for Maduro. In a statement in July 2024, Chinese leader Xi Jinping affirmed, “China will, as always, firmly support Venezuela’s efforts to safeguard sovereignty, national dignity, and social stability.”

On Jan. 15, Sen. Marco Rubio (R-Fla.), now secretary of state, asserted that the United States should reassess Chevron’s sanctions waiver allowing the oil company to operate.

“The Biden administration has allowed oil to flow. [Maduro] stole the election, completely went against what Biden promised he would do,” he mentioned.

Rubio emphasized that Venezuela is “unfortunately, not governed by government.”

“It’s governed by a narco-trafficking organization that has established itself as a nation state. And we have seen, I believe, upwards of seven, eight, nine million Venezuelans have just left the country, with more expected to follow,” he commented.

‘New President’s Unpredictability’

Tamas Varga, an oil analyst at PVM Oil Associates, informed the Epoch Times that OPEC, possessing significant spare capacity, “could effortlessly substitute the lost Venezuelan barrels.”

OPEC comprises 12 member nations: Venezuela, Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, and the United Arab Emirates.

Venezuelan President Nicolas Maduro speaks during the swearing-in ceremony at Palacio Federal Legislativo in Caracas, Venezuela, on Jan. 10, 2025. (Alfredo Lasry R/Getty Images) — Venezuelan President Nicolas Maduro speaks during the swearing-in ceremony at Palacio Federal Legislativo in Caracas, Venezuela, on Jan. 10, 2025. Alfredo Lasry R/Getty Images

Varga pointed out that sanctions on Venezuela should be considered in light of the Biden administration’s sanctions on Russia’s shadow fleet, affecting Venezuelan exports.

On Jan. 10, the U.S. Treasury imposed sanctions on 183 vessels that have transported Russian oil, many of which belong to the so-called shadow fleet comprised of old tankers operated by non-Western companies.

“If reversed, Venezuelan oil will continue to flow, most likely to China and Iran,” he remarked.

He highlighted that if the sanctions persist, the global oil balance impact will be minimal. Varga noted that the growth of U.S. oil and gas production will be more influenced by market economics rather than Trump.

A Chevron gas station in Los Angeles on May 22, 2023. (Mario Tama/Getty Images) — A Chevron gas station in Los Angeles on May 22, 2023. Mario Tama/Getty Images

He further explained that if the dollar remains robust during Trump’s term, oil prices will be higher in other currencies, leading to reduced demand.

“In conclusion, the current scenario paints a negative picture for oil prices, but acknowledging the unpredictability of the new president, the situation could rapidly change,” Varga concluded.

A Chevron spokeswoman informed The Epoch Times that Chevron operates in Venezuela in adherence to all applicable laws and regulations.

“We have been actively present in Venezuela for more than a century, with significant investments and a large workforce,” she stated. “We remain dedicated to the safety and welfare of our employees and their families, the integrity of our joint venture assets, and the positive impact of the company’s social and humanitarian programs on the lives of Venezuelans.”

Reuters contributed to this report.

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