Oil, Power & Sovereignty: Inside The Growing US-Venezuela Energy Partnership
By ESTHER McWILLIS-IKHIDE
A Dramatic Reversal in the US-Venezuela Oil Relationship
SEVEN months after a major political upheaval in Venezuela, the country’s oil industry is once again becoming closely tied to the United States.
American refineries are now taking in more than 500,000 barrels of Venezuelan crude every day, representing roughly half of the country’s estimated daily production.
The figures, disclosed by US Under Secretary of Energy Kyle Haustveit at an industry event in Houston, illustrate the speed with which Venezuela’s energy relationship with Washington has expanded.
Only months earlier, Venezuela’s oil exports to the United States stood at a much lower level.
The rapid increase now places American refineries at the centre of Venezuela’s oil recovery strategy and creates a new economic relationship between two countries whose ties had previously been defined by sanctions, diplomatic hostility and political confrontation.
Yet behind the rising production figures lies a much larger debate: Can Venezuela rebuild its oil industry while retaining control over the wealth it produces?
The World’s Largest Oil Reserves, but a Troubled Industry
Venezuela’s position in the global oil industry has always contained a striking contradiction.
The country possesses an estimated 303 billion barrels of proven oil reserves, placing it ahead of every other country in the world.
Those reserves represent roughly 17 per cent of global proven crude resources.
However, geological wealth has not translated into equivalent production strength.
Years of underinvestment, ageing infrastructure, sanctions and political instability weakened PDVSA and contributed to a long decline in production.
By the end of 2025, Venezuela was producing about one million barrels per day, representing only a small fraction of global supply.
Its enormous reserves therefore became a symbol of unrealised economic potential.
The current effort to raise output is an attempt to reverse that history.
Venezuelan officials expect production to approach 1.245 million barrels per day, while exports have also increased during the year.
The government is simultaneously attempting to increase fuel production and improve domestic supply.
However, rebuilding an oil industry after years of decline requires more than producing additional barrels.
It requires investment, technology, functioning refineries, modern infrastructure and access to the materials needed to process the country’s particularly heavy crude.
Why America Needs Venezuela’s Heavy Crude
The relationship also makes economic sense for the United States.
Venezuela produces heavy, sour crude, which is well suited to several refineries along the US Gulf Coast.
These facilities were designed to process heavier grades of petroleum and can benefit from increased access to Venezuelan supplies.
The United States is also providing Venezuela with significant volumes of naphtha.
Naphtha can be blended with Venezuela’s heavy crude, helping make the oil easier to transport and process.
In this sense, both sides appear to have something the other needs.
Venezuela has the reserves but requires investment and technical support.
The United States has sophisticated refining capacity and access to materials that can help Venezuela increase production.
That mutual dependence explains why the oil trade has expanded so quickly.
However, the political framework surrounding the arrangement means the partnership cannot be viewed solely through the lens of commercial economics.
Who Controls Venezuela’s Oil Money?
The most controversial aspect of the emerging relationship concerns the management of oil revenue.
President Donald Trump has made unusually direct statements about Washington’s role in Venezuela’s energy sector.
He has said the United States would tap Venezuela’s oil wealth and exercise control over the money generated from petroleum sales.
Secretary of State Marco Rubio later explained to Congress that oil revenue would be placed in an account under US oversight.
Venezuelan authorities, according to the arrangement described, would submit budget requests while Washington would maintain restrictions over the use of the funds.
Such an arrangement may be presented as a mechanism to prevent corruption, stabilise Venezuela’s economy or ensure that oil revenue supports reconstruction.
However, it also raises fundamental questions about sovereignty.
Oil has historically been the foundation of Venezuela’s economy and political power. Whoever controls the country’s petroleum revenue possesses significant influence over the direction of the state.
That makes the current arrangement highly sensitive.
If Venezuela’s economic recovery depends on US-controlled markets, US-supplied materials and US oversight of oil revenue, then the country may find itself confronting difficult questions about the limits of its economic independence.
The Mystery Surrounding Billions of Dollars
The debate has become even sharper because of uncertainty surrounding the total amount of money generated from Venezuelan oil sales.
The Financial Times reported that more than $13 billion had been collected from Venezuelan oil sales during the year.
President Trump later suggested that the figure was even higher.
Yet detailed information about the total volume of oil sold, the precise revenue generated and the distribution of those funds has remained limited.
A State Department official told Congress that around $3 billion had been authorised for disbursement to Venezuela.
That still leaves broader questions about the overall management of the revenue.
The Council on Foreign Relations has criticised the lack of transparency surrounding the financial arrangements and raised concerns about accountability.
The organisation also warned that excluding significant elements of Venezuela’s opposition and civil society from political negotiations could weaken efforts to establish a credible democratic transition.
For Venezuela, therefore, oil is once again becoming the centre of both economic hope and political controversy.
An Interim Government & an Uncertain Political Roadmap
The oil expansion is unfolding against the background of a major political transition in Caracas.
The interim government is led by former vice president Delcy Rodríguez, while Venezuela’s opposition has continued to advocate for a political roadmap involving presidential elections and negotiations.
Opposition figures, including Maria Corina Machado, have supported proposals for a new political transition.
The central question is whether Venezuela’s expanding oil industry will strengthen that transition or complicate it.
In many countries, natural resources can provide governments with the revenue needed to stabilise economies and finance reconstruction.
But resource wealth can also become a source of political conflict, particularly when there is uncertainty about who controls the money.
The future of Venezuelan democracy may therefore become closely connected to the management of its oil wealth.
A Partnership That Could Redefine Venezuela’s Future
The expansion of Venezuelan crude exports to the United States represents one of the most significant changes in the country’s energy sector in years.
Production is rising.
Exports are expanding.
American refineries are receiving larger volumes of Venezuelan oil.
At the same time, Washington is playing an increasingly influential role in the management of the country’s petroleum industry.
For supporters, the arrangement could help revive a sector that has suffered years of decline and provide the resources needed for Venezuela’s economic recovery.
For critics, however, the risks are equally clear.
Without transparency, accountability and a clearly defined political roadmap, increased production could create new structures of dependency rather than genuine economic independence.
The ultimate test will not simply be how many barrels Venezuela produces.
It will be whether the country can use its vast petroleum wealth to rebuild its economy, strengthen democratic institutions and improve the lives of its people while maintaining meaningful control over its own resources.
Venezuela has always had the oil.
What remains uncertain is whether the new energy relationship with the United States will finally unlock the benefits of that wealth—or create another chapter in the long struggle over who controls it.
