how do we interpret President Trump’s statement that proceeds from oil sales "will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States”?
https://x.com/frrodriguezc/status/2008994172121043392
Venezuelan state-owned company PDVSA issues statement saying negotiations with US on oil sales will occur in framework similar to that of Chevron and other foreign companies. In those deals, Venezuela receives tax and royalty payments which it uses to fund public spending.
But then how do we interpret President Trump’s statement that proceeds from oil sales "will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States”?
Proceeds from oil sales generate either oil company profits or taxes and royalties for the Venezuelan government. Which of these is President Trump planning to control?
One possibility is that the US is trying to set up an oil-for-essentials–type arrangement, in which the Venezuelan government’s take is deposited in a special fund that is then disbursed for Venezuelan imports under US authorization. This would be very similar to the Iraqi Oil-for-Food program, except that instead of the United Nations, it would be overseen by the US government and US authorities.
The other possibility is that President Trump is planning to take control of oil company profits to ensure that they are redirected towards investment in the country's oil industry. That would amount to the US nationalizing its own companies’ oil investments in Venezuela—quite a remarkable turn. It would be hard to see any oil companies buying into that deal (unless, that is, the Trump administration plans to compensate them with massive subsidies).
The most likely scenario seems to be that there is a deal for US companies to invest in Venezuela to raise production and receive the proceeds from oil sales, with Venezuela receiving its tax and royalty take. It is worth bearing in mind that this is exactly what Venezuela was doing before the US imposed sanctions on its oil industry during the first Trump administration.
posted by Satish Sharma at
02:58
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