Trump Greenlights China, India for Venezuela Oil Deals

President Donald Trump has announced he would welcome investment from China and India in Venezuela's crucial oil industry, signaling a new phase in the country's energy politics.

"China is welcome to come in and will make a great deal on oil," Trump told reporters. He also confirmed that the United States is actively working with India on a plan for it to purchase Venezuelan crude.

"India's coming in and they're going to be buying Venezuelan oil, as opposed to buying it from Iran," he stated, adding, "We've already made the deal, the concept of that deal."

A New Era for Venezuelan Oil Policy

This shift follows historic changes to Venezuela's nationalist oil policy approved by the country's acting president. The reforms, designed to attract foreign capital, include reduced taxes and greater ownership stakes for international oil companies.

These changes were implemented less than a month after U.S. forces captured former leader Nicolas Maduro. In a related move, the U.S. Treasury Department issued a general license that expands the ability of American companies to export, sell, and refine crude oil from the sanctioned South American nation.

The United States is now on track to import the most Venezuelan oil in a year as the Trump administration works to control the country's energy supply. Part of this strategy involves pressing oil companies to invest $100 billion to rebuild Venezuela's deteriorating oil infrastructure.

Tracking the Shift in Crude Shipments

While the U.S. is becoming the primary destination for Venezuelan oil, shipments to China have collapsed. After averaging 400,000 barrels a day last year, exports to China dropped to zero in January. This halt is the direct result of a U.S. naval crackdown on the "dark fleet" of tankers used to transport sanctioned oil.

The majority of Venezuelan crude now arriving in the U.S. is handled by Chevron Corp., which operates under a specific license to sell the sanctioned oil. Commodity trading giants Trafigura Group and Vitol Group account for about 20% of the supply.

The Trump administration tapped these two firms to help sell up to 50 million barrels of oil following Maduro's ouster in early January. According to Bloomberg data, Vitol and Trafigura are currently on course to lift 14 million barrels of Venezuelan crude. Much of this oil was loaded onto ships originally bound for China before January. The traders have since placed about 9 million barrels in Caribbean storage, with the remainder heading to markets in the U.S. and Europe.