Trump Admin Sends Tough Private Message to Oil Companies on VenezuelaBy Ben Lefebvre, Zack Colman and James BikalesPoliticoJanuary 3, 2026
https://www.politico.com/news/2026/01/03/trump-venezuela-oil-us-compani…
The White House has told companies they must rebuild Venezuela's crude-pumping infrastructure if they want compensation for assets seized by Caracas.
American oil companies have long hoped to recover the assets that Venezuela’s authoritarian regime ripped from them decades ago.
Now the Trump administration is offering to help them achieve that aim — with one major condition.
Administration officials have told oil executives in recent weeks that if they want compensation for their rigs, pipelines and other seized property, then they must be prepared to go back into Venezuela now and invest heavily in reviving its shattered petroleum industry, two people familiar with the administration’s outreach told POLITICO on Saturday. The outlook for Venezuela’s shattered oil infrastructure is one of the major questions following the U.S. military action that captured leader Nicolás Maduro.
But people in the industry said the administration’s message has left them still leery about the difficulty of rebuilding decayed oil fields in a country where it’s not even clear who will lead the country for the foreseeable future.
“They’re saying, ‘you gotta go in if you want to play and get reimbursed,’” said one industry official familiar with the conversations.
The offer has been on the table for the last 10 days, the person said. “But the infrastructure currently there is so dilapidated that no one at these companies can adequately assess what is needed to make it operable.”
President Donald Trump suggested in a televised address Saturday morning that he fully expects U.S. oil companies to pour big money into Venezuela.
“We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure and start making money for the country,” Trump said as he celebrated Maduro’s capture.
It’s been five decades since the Venezuelan government first nationalized the oil industry and nearly 20 years since former President Hugo Chávez expanded the asset seizures. The country has some of the largest oil reserves in the world, but its petroleum infrastructure has decayed amid years of mismanagement and meager investment.
Initial thoughts among U.S. oil industry officials and market analysts who spoke to POLITICO regarding a post-Maduro Venezuela focused more on questions than answers.
The administration has so far not laid out what its long-term plan looks like, or even if it has one, said Bob McNally, a former national security and energy adviser to President George W. Bush who now leads the energy and geopolitics consulting firm Rapidan Energy Group.
“It’s not clear there’s been a specific plan beyond the principal decision that in a post-Maduro, Trump-compliant regime that the U.S. companies — energy and others — will be at the top of the list” to reenter the country, McNally said. He added: “What the regime looks like, what the plans are for getting there, that has not been fully fleshed out yet.”
A central concern for U.S. industry executives is whether the administration can guarantee the safety of the employees and equipment that companies would need to send to Venezuela, how the companies would be paid, whether oil prices will rise enough to make Venezuelan crude profitable and the status of Venezuela’s membership in the OPEC oil exporters cartel. U.S. benchmark oil prices were at $57 a barrel, the lowest since the end of the pandemic, as of the market’s close on Friday.
The White House did not immediately reply to questions about its plan for the oil industry, but Trump said during Saturday’s appearance at his Mar-a-Lago estate in Florida that he expected oil companies to put up the initial investments.
“We’re going to rebuild the oil infrastructure, which requires billions of dollars that will be paid for by the oil companies directly,” Trump said. “They will be reimbursed for what they’re doing, but it’s going to be paid, and we’re going to get the oil flowing.”
However, the administration’s outreach to U.S. oil company executives remains “at its best in the infancy stage,” said one industry executive familiar with the discussions, who was granted anonymity to describe conversations with the president’s team.
“In preparation for regime change, there had been engagement. But it’s been sporadic and relatively flatly received by the industry,” this person said. “It feels very much a shoot-ready-aim exercise.”
Venezuela’s oil output has fallen to less than a third of the 3.5 million barrels per day that it produced in the 1970s, and the infrastructure that is used to tap into its 300 billion barrels of reserves has deteriorated in the past two decades.
“Will the U.S. be able to attract U.S. oilfield services to go to Venezuela?” the executive asked. “Maybe. It would have to involve the services companies being able to contract directly with the U.S. government.”
Talks with administration officials over the past several days also involved the fate of the state oil company, which is known as PdVSA, this person added.
“PdVSA will not be denationalized in some way and broken,” this person said. “Definitely it’s going to be wholesale remaking of PdVSA leadership, but at least at this point, there is no plan for denationalization or auctioning it off. It’s in the best position to keep production flowing.”
Chevron, the sole major oil company still working in Venezuela under a special license from the U.S. government, said in a statement Saturday that it “remains focused on the safety and wellbeing of our employees, as well as the integrity of our assets.
“We continue to operate in full compliance with all relevant laws and regulations,” Chevron spokesperson Bill Turenne said in a statement.
Evanan Romero, a Houston-based oil consultant involved in the effort to bring U.S. oil producers back to Venezuela, said in a text message that Saturday’s events laid the groundwork for American oil companies to return “very soon.”
Romero is part of a roughly 400-person committee, mostly made up of former employees of the Venezuelan state oil company Petróleos de Venezuela, that formed about a year ago to strategize about how to revive the country’s oil industry under a new government.
The committee, which is not directly affiliated with opposition leader María Corina Machado’s camp, is debating the role any new government should have in the oil sector. Some members favor keeping the industry under the control of the government while others contend that international oil majors would return only under a free market system, Romero said.
Ultimately, the “orderliness” in any transition will determine U.S. investment and reentry in Venezuela, said Carrie Filipetti, who was deputy assistant secretary for Cuba and Venezuela and the deputy special representative for Venezuela at the State Department in Trump’s first administration.
“If you were to see a disorderly transition, obviously I think that would make it very challenging for American companies to enter Venezuela,” said Filipetti, who is now executive director of nonpartisan foreign policy group The Vandenberg Coalition. “It’s not just about getting rid of Maduro. It’s also about making sure that the legitimate opposition comes into power. ”
Richard Goldberg, who led the White House’s National Energy Dominance Council until August, said the Trump administration could offer financial incentives to coax companies back into Venezuela. That could include the Export-Import Bank and the U.S. International Development Finance Corp., whose remit Congress expanded in December, underwriting investments to account for political and security risks.
Promoting U.S. investment in Venezuela would keep China — a major consumer of Venezuela’s oil — out of the nation and cut off the flow of the discounted crude that China buys from Venezuela’s ghost fleets of tankers that skirt U.S. sanctions.
“There’s an incentive for the Americans to get there first and to ensure it’s American companies at the forefront, and not anybody else’s,” said Goldberg.
It’s unclear how much the Trump administration could accelerate investment in Venezuela, said Landon Derentz, an energy analyst at the Atlantic Council who worked in the Obama, Trump and Biden administrations.
Many consider Venezuela a longer-term play given current low prices of $50 per barrel oil and the huge capital investments needed to modernize the infrastructure, Derentz said. But as U.S. shale oil regions that have made the country the world’s leading oil producer peter out over time, he said, it would become increasingly economical to export Venezuelan heavy crude to the Gulf Coast refineries built specifically to process it.
“Venezuela would be a crown jewel if the above-ground risk is removed. I have companies saying let’s see where this lands,” said Derentz, who served in Trump’s National Security Council during his first term. “I don’t see anything that gives me the sense that this is a ripe opportunity.”
Maduro, Venezuela, The U.S.—And The Oil Shock China Can’t Price InGüney YıldızForbesJanuary 3, 2026
https://www.forbes.com/sites/guneyyildiz/2026/01/03/maduro-venezuela-th…
Venezuelan President Nicolás Maduro was captured by U.S. special forces in Caracas early on January 3 following airstrikes and explosions around the capital, according to multiple news outlets. Within hours, tankers in the Caribbean started altering course. By midday, the diesel crack looked like it was widening. This suggests the market isn't pricing a global supply shock, but the specific risk of a heavy sour crude squeeze.
That spread tells the whole story. Venezuela represents less than 1% of global oil consumption, but its Merey 16 grade feeds refineries with coking capacity that can't easily switch to light sweet barrels.
This operation raises profound questions about international law and U.S. unilateralism. Critics point to potential violations of the UN Charter's prohibition on force, echoing debates over the 2003 Iraq invasion. Repercussions could include strained U.S.-Latin America ties, accelerated migration from Venezuela, and tests of alliances for Russia and China. These broader geopolitical shifts may reshape global norms for years, overshadowing short-term market moves. Yet the energy dimensions remain vital, as disrupted flows expose dependencies in an already volatile crude landscape.
China’s exposure hits three specific areas.
The first is financial: an estimated $17-19 billion in outstanding principal from China Development Bank's oil-for-loans program, per AidData research. That's the largest single-country commodity-backed position in Beijing's portfolio out of the $60 billion extended since 2007.
The second is operational. Shandong’s independent refiners configured coking units specifically for Venezuelan heavy crude, a grade trading at deep discounts because Western buyers can’t touch it. The third is strategic. Washington just showed it's willing to use kinetic force to disrupt Chinese commodity supply chains in the Americas.
Chevron’s joint ventures keep running under a renewed specific license from Treasury, according to NPR. Data indicates U.S.-bound exports of roughly 150,000 bpd in November 2025, per Reuters data. Valero and Marathon have first call on those barrels. The downstream risk for China is simple: Every Venezuelan barrel reaching American shores is one Beijing must replace from a tighter market at full price.
The Feedstock Cliff
Position managers at Shandong’s teapots face an immediate question: Where do replacement barrels come from?
Venezuela's exports hit roughly 921,000 bpd in November 2025, according to Reuters, with China taking about 80% of the total (some 746,000 bpd). These barrels often arrived via Malaysia’s ship-to-ship transshipment hubs or through rebranding practices designed to hide their origin. Reuters previously described traders rebranding Venezuelan cargoes as “Brazilian” to bypass transshipment steps.
That channel looks tighter and higher-friction than it did in late 2025. Treasury’s entity-specific designations, which name vessels by IMO number, reduce plausible deniability. The threat environment alone is enough to deter loadings and prompt diversions at the margin.
Substitutes exist, but none replicate the economics. It’s not because Venezuela is unique, but because the replacement set is limited by crude quality, freight and pipeline/tanker logistics.
Merey is genuinely heavy. Crude-profile data sources put it around the mid-teens API (often cited around ~16.6). Merey crude profile Western Canadian Select is also heavy and sour, widely described around the low-20s API band (typically ~19–22 API). WCS crude profile Mexican Maya similarly sits in a heavy-sour range; PMI describes Maya as heavy at ~21–22 API. PMI on Maya
The price problem is that discount numbers are moving targets. Differentials swing quickly based on freight, refinery runs and sanctions friction. It’s safer to think in regimes: sanctioned Venezuelan barrels have often cleared at meaningful discounts to benchmarks, but any attempt to pin a tight range (like “$10–13 below Brent”) should be read as time-stamped rather than a stable attribute.
Canadian heavy via the Trans Mountain Pipeline Expansion is a plausible swing barrel since TMX adds 590,000 bpd of Pacific-facing capacity from Alberta, per Reuters. But if Shandong refiners bid more aggressively for Canadian cargoes, the WCS differential could narrow, which raises feedstock costs and tightens supply for US Gulf Coast competitors who also need heavy crude.
Put differently, Valero and Dongming Petrochemical are now competing for the same Canadian molecules. Someone pays more.
The Credit Exposure
China Development Bank's Venezuela position looks more like a structural write-down risk than a trading loss.
CDB extended over $60 billion since 2007, according to CSIS analysis, secured by future oil shipments rather than sovereign guarantees. The model worked when Venezuela produced 2.4 million bpd, but it broke when output collapsed, falling to as low as 350,000 bpd in 2020 before recovering to roughly 900,000-1.1 million bpd by late 2025, per OPEC and PDVSA data.
CDB granted grace periods, accepted delayed shipments, and rolled over principal. The outstanding balance stabilized at $17-19 billion under assumptions that no longer hold. The Stimson Center notes that China agreed to defer payments repeatedly as Venezuela's repayment capacity eroded.
The collateral is underground, locked behind degraded upgraders, an elevated maritime risk environment, and a transitional government that may invoke odious debt doctrine to subordinate Chinese claims.
Recovery scenarios:
Scenario A (45%): Pragmatic accommodation. Beijing quietly engages transitional government, negotiates 40-50 cents on the dollar, redirects teapot demand to Canadian and Iraqi grades. Financial loss absorbed to preserve broader trading relationships.
Scenario B (35%): Extended standoff. Beijing refuses recognition, teapots attempt continued sourcing despite vessel designations. U.S. escalates to secondary sanctions on Chinese banks processing Venezuelan-origin payments. Teapot margins collapse within six to nine months.
Scenario C (20%): Venezuelan collapse. Transitional government fails, military factions fragment, production drops below 600,000 bpd. Neither Chinese debt recovery nor American reconstruction succeeds. Heavy sour exits global market for years.
Actor Calculus
Shandong independents built their margin on sanctions arbitrage by purchasing Venezuelan crude at deep discounts. That model is finished. Dongming, Hengli and peers face margin compression until feedstock slates reconfigure. Some won't survive the transition.
State majors Sinopec and CNPC maintained a deliberate distance from Venezuelan exposure; scholars describe this as a "lender's trap" China created for itself. They now face political pressure to absorb teapot shortfalls, meaning state balance sheets essentially subsidize private operators' stranded positions.
CDB must choose between marking down the portfolio (signaling to Ecuador, Pakistan, and other BRI borrowers that commodity-backed loans can't survive regime change) or extending indefinitely (carrying non-performing assets). Neither option looks attractive.
Beijing leadership condemned the "hegemonic" intervention but needs economic stability. Escalating with Washington over Venezuelan principle invites secondary sanctions targeting Chinese banks' dollar clearing. Pragmatism suggests quiet accommodation, even if it contradicts public rhetoric.
Chinese Diplomats Arrived in Venezuela for Talks with Maduro Hours Before US Strikes — And Are Still There: ReportSarah RumpfMediaiteJanuary 3, 2026
https://www.yahoo.com/news/articles/chinese-diplomats-arrived-venezuela…
Hours before Venezuelan President Nicolás Maduro was captured during a U.S. military operation, he met with Chinese diplomats, who are reportedly still in Caracas.
News broke in the wee hours of Saturday morning that President Donald Trump’s administration had conducted air strikes in Caracas, Venezuela’s capital city, captured Maduro and his wife, Cilia Flores, and brought them to the U.S.
The strikes sparked loud criticism for multiple reasons, chiefly because Trump had not sought authorization from Congress beforehand and because of his pardon in December for Juan Orlando Hernandez, the former president of Honduras who was convicted of drug trafficking. Others have cited Maduro’s brutal oppression of his own people and how he seized power for a third term in July 2024 despite election results showing opposition leader Edmundo González had won.
Friday evening, Maduro met with several Chinese officials, including Qiu Xiaoqi, Chinese President Xi Jinping’s Special Envoy for Latin America and the Caribbean; Lan Hu, China’s ambassador to Venezuela; Liu Bo, Director of the Latin America and Caribbean Department of the Chinese Foreign Ministry; Wang Hao, Deputy Director-General of the same department; Liu Zhen, regional attaché; and several other top diplomats and CCP officials.
Maduro shared several photos and videos from his meeting with the Chinese officials on his Instagram page.
“Had a pleasant meeting with Qui Xiaoqi, Special Envoy of President Xi Jinping,” the caption read (Spanish translation to English by Instagram). “We reaffirm our commitment to the strategic relationship that advances and strengthens in various areas for the construction of the world #Multipolar of development and peace. China and Venezuela! United!”
“Received President Xi Jinping’s Special Envoy for Latin America and the Caribbean, Qiu Xiaoqi,” read the caption on the second post (again, translation by Instagram). “A fraternal encounter that reaffirms the strong ties of brotherhood and friendship between China and Venezuela. Every Test and Every Time!”
In a social media post, the Chinese Ministry of Foreign Affairs condemned the “U.S.’s blatant use of force against a sovereign state and action against its president.”
“Such hegemonic acts of the U.S. seriously violate international law and Venezuela’s sovereignty, and threaten peace and security in Latin America and the Caribbean region. China firmly opposes it,” the post continued. “We call on the U.S. to abide by international law and the purposes and principles of the UN Charter, and stop violating other countries’ sovereignty and security.”
Because of the timing of the meeting and the early morning U.S. strikes, it is widely believed that the Chinese diplomats were still in Caracas during the strike and capture of Maduro, as multiple reporters following the region reported. Thus far, no reports have said the Chinese diplomats were known to have left before the strikes.
Laura Loomer, the far-right activist and staunch Trump ally who recently became a member of the Pentagon Press corps, was among those who posted reports that the Chinese delegation was “still in Venezuela” during the strikes. Loomer has garnered more than her share of controversy over the years but has managed to cling to her spot in Trump’s inner circle and is known frequently speak with the president.
🚨 TRUMP SENDS STRONG MESSAGE TO CHINA’S XI JINPING AS CHINESE DELEGATION IS STILL IN VENEZUELA AFTER MEETINGS WITH MADURO TODAY 🚨 Just hours before US Airstrikes in Venezuela past midnight today , @NicolasMaduro met with a Chinese delegation led by Qiu Xiaoqi, China's Special… https://t.co/4Ol5q2k9lm pic.twitter.com/uzaFsiRI6P
— Laura Loomer (@LauraLoomer) January 3, 2026
The post Chinese Diplomats Arrived in Venezuela for Talks with Maduro Hours Before US Strikes — And Are Still There: Report first appeared on Mediaite.
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Sarah Rumpf joined Mediaite in 2020 and is a Contributing Editor focusing on politics, law, and the media. A native Floridian, Sarah attended the University of Florida, graduating with a double major in Political Science and German, and earned her Juris Doctor, cum laude, from the UF College of Law. Sarah's writing has been featured at National Review, The Daily Beast, Reason, Law&Crime, Independent Journal Review, Texas Monthly, The Capitolist, Breitbart Texas, Townhall, RedState, The Orlando Sentinel, and the Austin-American Statesman, and her political commentary has led to appearances on television, radio, and podcast programs across the globe. Follow Sarah on Threads, Twitter, and Bluesky.
