In a move that could reshape global energy flows and a battered nation's economy, former U.S. President Donald Trump has announced a surprise plan for Washington to purchase millions of barrels of Venezuelan crude oil. This potential deal, if it holds, promises a crucial financial infusion for the crisis-stricken South American country, but it rests on a highly uncertain political truce.
A Potential Economic Lifeline for Venezuela
President Trump stated on his Truth Social platform that the United States would take between 30 million to 50 million barrels of oil from Venezuela, paying market prices. He emphasised that he would personally oversee the proceeds to ensure they benefit both the Venezuelan and American people. For Venezuela, which is sitting on over 30 million barrels of unsold crude due to a partial U.S. embargo, this represents a chance to sell at full value instead of the steep discounts forced by black-market sales.
Economists see this as a critical opportunity. "It sounds contradictory," said Alejandro Grisanti, president of the Caracas-based consulting firm Ecoanalitica. "But if we're able to achieve some kind of understanding between the U.S. and Venezuela, we can easily move from a strong negative decline to positive growth." The deal could generate billions in urgently needed cash for a nation dependent on importing food and basic goods, and facing a projected 700% inflation rate this year.
The Fragile Political Ground
The entire arrangement depends on a tenuous political detente, complicated by Trump's recent order for a U.S. military raid that led to the arrest of strongman Nicolás Maduro. Power has shifted to his deputy, Delcy Rodriguez, whom Trump has warned must cooperate with the U.S. or face consequences. Rodriguez, sworn in as acting president, now faces the immense pressure of pleasing Washington while maintaining unity within the regime's factions.
U.S. Secretary of State Marco Rubio framed the oil transfer as the first step in a three-phase plan: stabilising hard-currency income, opening Venezuela's vast oil reserves to foreign companies, and overseeing a reconciliation program to restore political rights. "We feel we are moving forward in a very positive way," Rubio said. However, analysts like Clayton Seigle from the Center for Strategic and International Studies warn that "governance and transition plans are ambiguous at best," casting doubt on long-term stability.
Long Road to Oil Recovery and Public Suffering
While the deal could prevent the costly shutdown of oil wells and help clear storage bottlenecks, reviving Venezuela's oil industry to its former glory requires massive investment. The country's output, stabilised at around 1 million barrels per day, is a fraction of the 3 million barrels it pumped two decades ago. Experts estimate that with a few billion dollars, production could rise 50% in 18 months, but reaching over 2 million barrels daily would need tens of billions and six or more years.
On the ground, ordinary Venezuelans remain wary. The exchange rate on crypto platforms like Binance shows the U.S. dollar fetching over 800 bolivars, far worse than the official rate of 308, indicating fear of dollar shortages. A recent Gallup study found that three in five Venezuelans struggled to afford enough food last year, and only 19% of adults had full-time employment. As former deputy oil minister Evanan Romero starkly put it, "If this doesn't happen in a few years, everyone's going to be dead."
The path forward is fraught with 'ifs'. The deal offers a glimmer of hope for Venezuela's economic recovery and could ease global energy bottlenecks. Yet, its success is inextricably tied to a fragile political understanding that has only just begun, leaving the future of this potential oil windfall hanging in the balance.
