Venezuela will ship sanctioned oil to the U.S. indefinitely, sources close to the White House told CNBC on Wednesday.
President Donald Trump said Tuesday that Venezuela will turn over 30 million to 50 million barrels of sanctioned oil, which will be sold at market prices.
“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 said in a social media post.
The 50 million barrels are only the first tranche and shipments will continue indefinitely, the sources said. U.S. sanctions against Venezuela will be selectively rolled back to enable the transportation and sale of the oil on global markets, the sources said.
Proceeds from the oil sales will settle in U.S. controlled accounts, the sources said, with the money released back to Venezuela at the discretion of the U.S., they said.
Energy Secretary Chris Wright later confirmed the plan at a conference hosted by Goldman Sachs in Miami on Wednesday.
“We’re going to market the crude coming out of Venezuela,” Wright said. “First this backed up, stored oil and then indefinitely, going forward, we will sell the production that comes out of Venezuela into the marketplace.”
Previously, the sanctioned oil would have gone mostly to China but will now be rerouted to the U.S. instead. Trump said Tuesday that storage ships will transport the oil directly to receiving docks in the U.S.
Venezuela, a founding member of OPEC, has the largest proven crude oil reserves in the world. But it is only producing about 800,000 barrels per day, according to data from energy consulting firm Kpler. The U.S., by contrast, is currently producing about 13.8 million bpd.
Trump has made clear that U.S. investment in Venezuela’s oil sector is a central objective of the military action that ousted President Nicolas Maduro last Saturday. The president has called on major U.S. oil companies to rebuild the South American nation’s energy infrastructure system, from wellheads to pipelines, though the companies have so far been largely silent.
Wright will meet with oil executives about Venezuela at the Goldman conference.
“Secretary Wright remains in close contact with U.S. oil companies and plans to meet with several of them at the Goldman Sachs Energy Conference in Miami on Wednesday,” a Department of Energy spokesperson told CNBC.
