Oil prices held onto recent declines on Wednesday as traders weighed fresh moves by the United States to tighten its grip over Venezuela’s future crude sales, adding another layer of uncertainty to an already well-supplied global market.
West Texas Intermediate (WTI) traded near $56 a barrel, stabilising after sliding about 3% over the previous two sessions. The pullback came as investors digested comments from US Energy Secretary Chris Wright, who said Washington would initially begin offering stored Venezuelan crude, while the Energy Department confirmed that oil was already being marketed under a new framework.
Venezuela’s state-owned oil company Petroleos de Venezuela SA (PDVSA) said it is in negotiations with Washington to sell crude through an arrangement similar to the current deal with Chevron Corp., the only major US oil company still operating in the country. Under the proposed plan, the US would exert a degree of operational oversight over PDVSA, according to a report by The Wall Street Journal, citing people familiar with the discussions.
President Donald Trump told The New York Times that US supervision of Venezuela’s oil sector could last for years, noting that “the oil will take a while” to fully come back online. The White House is pushing for American firms to help rebuild Venezuela’s battered energy industry, which has suffered from years of underinvestment and sanctions. Trump is scheduled to meet US energy executives on Friday, as his administration selectively rolls back restrictions on Venezuela’s oil sector.
Signs of renewed commercial interest are already emerging. Citgo Petroleum Corp., the US refiner indirectly owned by Venezuela, is considering resuming crude purchases for the first time since sanctions cut off supply in 2019. Trading house Trafigura Group has also expressed interest, while Chevron is seeking an extension of its operating license.
On Tuesday, Trump said Venezuela would relinquish up to 50 million barrels of oil to the US, worth more than $2 billion, with proceeds held in US Treasury accounts and shared between both countries.
Still, analysts caution against expectations of a rapid production surge. “Venezuelan production will not suddenly explode,” said Ole Hansen, head of commodities strategy at Saxo Bank, adding that while global balances may not shift soon, individual buyers and sellers will feel the impact.
China, Venezuela’s main oil buyer during the sanctions era, criticised Washington’s reported pressure on Caracas to cut ties with US rivals, calling it a “bullying act.” Meanwhile, the US continues its naval blockade, recently seizing two more sanctioned tankers, including the Bella 1, intercepted south of Iceland after attempting to evade capture.
