US-backed deals draw oil, trading giants to export Venezuelan crude: report

US government-backed deals to export Venezuelan crude from the beleaguered South American country have attracted interest from some of the world’s biggest majors and international trading houses, ramping up the importance of the country’s energy reserves in the wake of political changes.

Oil major Chevron Corp and the global trading houses Vitol, Trafigura, and others have positioned themselves to market Venezuelan crude, as Washington looks to wrest long-term management of the South American nation’s oil sales and profits.

According to Reuters, the competition highlights the oil industry’s renewed effort to access Venezuela’s crude reserves and production capacity, sources familiar with the matter said.

American leaders have moved toward controlling Venezuelan oil exports for as long as necessary, with export contracts now under the eagle eye of the US.

White House talks and industry lobbying

The campaign for access has escalated ahead of discussions at the White House, where Vitol and Trafigura are scheduled to meet with Chevron and other large oil corporations to discuss prospective roles in Venezuela’s oil industry.

These negotiations come after reports that firms have aggressively lobbied the US government for a part of what are expected to be highly lucrative export agreements.

The negotiations come as US President Donald Trump demands that Venezuela provide the US with complete access to its oil sector.

This demand was issued days after the United States apprehended Venezuelan President Nicolas Maduro.

US officials have since stated that Washington will maintain control over Venezuela’s oil sales and income indefinitely, changing how the country’s energy resources are managed and marketed overseas.

PDVSA inventories in the centre

At the heart of the talks are preliminary agreements to market up to 50 million barrels of oil that Venezuela’s state-run oil company, PDVSA, has collected in inventory.

These stockpiles expanded during a harsh oil embargo, which resulted in the seizure of four tankers, two sources said.

PDVSA has admitted that conversations are ongoing, but has not disclosed specifics. Chevron, the business’s principal joint venture partner, is thought to be in a good position to negotiate an extension of its license to operate in Venezuela, given that it is still the only major oil corporation working in the nation.

Chevron may also trade at least some of PDVSA’s own production, according to sources.

However, for the first time in years, Chevron will face competition from other foreign corporations wanting similar access.

This move creates a more crowded market as trading houses and oil companies seek to reestablish or grow their presence in Venezuelan crude exports.

Balancing debt, output, and pricing

PDVSA intends to include joint venture partners and former clients in the new agreements.

According to insiders, the idea is to make debt repayment easier, increase output, and ensure fair pricing for oil grades bound for specified markets.

Under the new system, having a larger group of partners may assist PDVSA in stabilising operations and boost its capacity to place barrels in foreign markets.

On Wednesday, the US Department of Energy announced that it was working with commodity marketers and banks to execute and financially support Venezuelan crude and fuel sales, but did not name any specific companies.

Details about the competition for these contracts had not been disclosed.

Trading houses enter the fray

According to sources, Vitol, headquartered in Geneva, has already secured a preliminary US government authorisation allowing it to begin discussions for the purchase and export of Venezuelan oil for an 18-month term.

Before US sanctions were implemented in 2019, Vitol and Trafigura traded Venezuelan oil and marketed cargoes received by PDVSA’s partners in recent years.

Their capacity to quickly deploy tanker fleets to Venezuela and trade significant volumes of petroleum offers them a competitive advantage over other companies operating in the nation.

As negotiations progress, the outcome will determine which businesses obtain access to Venezuela’s oil flows in a system influenced increasingly by US monitoring and competing commercial interests.

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