The United States has transferred the proceeds from sales of Venezuelan oil to Caracas, following a deal agreed by the two governments in January.
The deal involved Venezuela “turning over” between 30 million and 50 million barrels of crude to the United States, according to a social media post by President Trump. The U.S. would then sell the barrels and use the money to help revive Venezuela’s economy, per statements made at the time.
“Venezuela has officially received all $500 million from the first Venezuelan oil sale,” an unnamed U.S. government official told Reuters. The money will be “disbursed for the benefit of the Venezuelan people at the discretion of the U.S. government,” the official also said.
The money was deposited in an account in Qatar, considered a neutral and safe location for the funds, to be controlled by the U.S. federal government. This first Venezuelan oil sale will be followed by more, with the proceeds used to stabilize the country.
“So in essence, we allowed Venezuela to use their own oil to generate revenue to pay teachers and firefighters and police officers and keep the function of government operating so we didn’t have systemic collapse,” Secretary of State Marco Rubio explained back in January.
Meanwhile, commodity traders are vying for Venezuelan oil deals with Washington following the latest events. Companies including Chevron, Vitol, and Trafigura are seeking to expand their fleets in order to be able to handle as big a portion of those 30-50 million barrels as possible.
Crude oil exports could eventually approach the roughly 500,000 barrels per day Venezuela shipped to the U.S. before the latter showered it with sanctions, but unnamed sources who spoke to Reuters in January warned that the first shipments would come from oil in storage, accumulated to date. That could take three to four months and will also involve clearing up and resolving bottlenecks at the Jose terminal, where storage capacity is limited.
By Charles Kennedy for Oilprice.com
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