President Donald Trump said Saturday he’s open to investment from China and India in Venezuela’s oil sector, a notable change in how Washington is handling the South American nation’s energy industry after Nicolas Maduro’s recent capture.
Trump told reporters on Air Force One while flying to Mar-a-Lago that China could get into the Venezuelan market and land good deals on oil. “China is welcome to come in and will make a great deal on oil,” the president said.
India seeks alternative oil sources amid tariff pressure
Trump also talked about ongoing discussions with India over Venezuelan crude purchases. “India’s coming in and they’re going to be buying Venezuelan oil, as opposed to buying it from Iran,” he said. “We’ve already made the deal, the concept of that deal.”
The India arrangement follows weeks of talks between officials in Washington, New Delhi, and Caracas. Indian Prime Minister Narendra Modi had a phone call with Acting President Delcy Rodríguez on January 30 about expanding energy cooperation. India is the world’s third-biggest oil consumer and wants this deal as a way to rely less on Middle Eastern and Russian suppliers.
The timing looks intentional. The Trump administration recently threatened India with tariffs between 25% and 50% if it keeps buying oil from Russia and Iran. The Venezuelan oil offer works as an incentive to shift India’s energy purchases toward sources that fit American interests in the Western Hemisphere.
Venezuela’s acting president signed off on major reforms to the country’s oil regulations earlier this week. That was less than a month after U.S. forces took Maduro into custody. The changes flip the socialist framework that ran the industry under the previous government.
The new law scraps the 33% extraction tax and puts in an “integrated hydrocarbon tax” capped at 15%. Royalty rates, which were locked at 33.33%, now work on a sliding scale that starts at 15%. The exact rate depends on what each project needs and how competitive it is.
After these legislative changes, the U.S. Treasury Department issued a general license letting American companies export, sell, and refine crude from the sanctioned country.
There are strict financial controls to stop oil revenues from getting to Maduro supporters or funding resistance movements. Secretary of State Marco Rubio confirmed that money from these sales is sitting in a blocked account in Qatar. The funds get carefully monitored and will move to the U.S. Treasury before going out for humanitarian projects and rebuilding efforts that Venezuela’s interim government approves.
US emerges as top buyer as China shipments halt
American imports of Venezuelan oil are getting close to their highest level in a year. The Trump administration took control of the country’s energy operations and pushed oil companies to put in $100 billion toward rebuilding Venezuela’s oil infrastructure.
The United States has become the main destination for Venezuelan oil after Maduro’s removal, but shipments to China have stopped completely. Chinese imports averaged 400,000 barrels daily last year but dropped to zero in January because of U.S. naval operations going after vessels used to move sanctioned oil to China.
Chevron Corp. supplies most Venezuelan crude coming into the United States under a U.S. license that allows sales of sanctioned oil. Commodity trading firms Trafigura Group and Vitol Group provide about 20% of these supplies. The Trump administration picked these traders to help sell up to 50 million barrels after Maduro’s January ouster.
Bloomberg data shows Vitol and Trafigura are on track to handle 14 million barrels of Venezuelan crude. A lot of this oil was already loaded on ships heading to China before January. The traders have put around 9 million barrels in Caribbean storage facilities. The rest is going to American and European markets.
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Source: https://www.cryptopolitan.com/trump-welcomes-china-and-india-investment/
