Global oil trading houses have reportedly taken the lead in securing deals for Venezuelan crude, outpacing U.S. energy majors.
Vitol, Trafigura Eye Venezuelan crude
Despite President Donald Trump‘s announcement that U.S. majors would invest billions in Venezuela, the first companies to secure business in the country were Dutch-trader Vitol and Singapore-based Trafigura, two non-U.S. entities, reported Reuters on Monday. The U.S. government selected these companies to quickly restart Venezuelan oil exports, a crucial step before reconstruction can commence, as per the publication
Both Vitol and Trafigura have secured preliminary special licenses allowing them to negotiate and export Venezuelan crude, with Trafigura preparing to load its first cargo this week. The traders vied with Chevron Corp (NYSE:CVX) for the supply agreements.
Washington and Caracas are close to a $2 billion agreement to sell up to 50 million barrels of stranded Venezuelan crude to U.S. refiners and other buyers, unlocking oil stuck due to the blockade. White House told the publication that the initial sales are key to channeling funds back into Venezuela for basic services while establishing a framework for steady production, sales, and refining.
Oil Majors Wary As Chevron Stays Upbeat
This development comes in the wake of Trump’s push for U.S. oil companies to invest $100 billion in Venezuela’s oil sector after the removal of President Nicolás Maduro.
However, several oil giants expressed skepticism about investing in Venezuela amid uncertainty and a lack of strong legal and commercial reforms in place. Trump is particularly unhappy with Exxon Mobil‘s (NYSE:XOM) response and is considering excluding the company from the initiative. This could have opened up opportunities for other companies, such as Vitol and Trafigura, to step in and secure lucrative deals in Venezuela.
By contrast, Chevron, the only U.S. oil company operating in Venezuela amid a sanctions waiver under its U.S. license, struck an upbeat tone on the country's prospects. Vice Chair Mark Nelson said Chevron could lift output by roughly 50% over the next 18 to 24 months by maximizing existing assets and infrastructure.
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