oil

The impact the Rodríguez administration could have on the Venezuelan oil industry, even under the new Hydrocarbons Law, would be unsustainable and limited in scope. Structural weakness surrounding the Delcy government and the National Assembly’s lack of legitimacy, commitment to the rule of law, and popular support will restrain the reach of her reforms. Nevertheless, the law will test the willingness of the private sector to run both upstream and downstream operations. These measures could deliver a limited economic boost, that despite American supervision, will be weaponized politically by window-dressing the regime’s legitimacy and stalling further political and economic reforms. It’s precisely this flawed political and legal foundation that undermines the sustainability of the economic gains that the new law could provide.

For Venezuela and PDVSA to reclaim relevance in the international oil market what is required are not incremental improvements but a comprehensive overhaul of the industry, the company, and the constitutional framework that ties them together. The reforms must prioritize transparency, accountability, and insulating the industry and PDVSA from political pressures under strong political coverage that provides long term stability. These measures are something an interim administration, independent of who is in charge, will be unable to provide. Only then would international companies and capitals commit to the long term projects needed.

Once the country finds its political footing under a popularly elected and legitimate government can longlasting and durable reform take place. At this point multiple options may surface. There could be a scenario where we see PDVSA take a back seat while the country creates a competitive fiscal system prioritizing royalty collections while up and downstream operations are run by private enterprises. Remaining PDVSA assets and JV operations would be divested gradually as production capacity is recovered in the hands of private enterprises. However, revitalizing PDVSA as a competitive oil company should remain as a national strategic objective. Venezuelans would greatly benefit from building a company able to compete in and outside of the Venezuelan market.

However, the only way to relaunch PDVSA as a relevant actor in the international market is by allowing it to enter the 21st century oil dynamics and embracing a partial privatization via a minority share offering in international equity markets. Beyond the much needed capital that would be raised in the initial and consequent secondary offerings, plus the potential to tap debt markets along the way, going public will create an additional moat and isolate the company some steps from further political interference. A publicly traded PDVSA would not only need to answer to the government but to energy analysts, independent shareholders, and international compliance and regulatory frameworks alike. It will be the pressure generated by the external scrutiny that will enable PDVSA to be scaled up back into international relevance. Given the precarious financial and operational standing of the holding, a partial privatization is not feasible on day one or two of a political transition and economic recovery phase. But it is a question that will become relevant once the objective becomes long sustainable growth.

PDVSA would need to cut all non-essential personnel and assets, streamlining its operations. Every dollar spent should be evaluated under a return-on-capital framework, making financial discipline central to strategic planning.

The privatization of PDVSA has been a taboo for Venezuelan society despite serious attempts in late 1990s to execute such an operation. However, the devastation that the industry suffered under chavista mismanagement provides a clean slate opportunity to relaunch PDVSA and the oil industry under a modern governance framework. For too long the Venezuelan oil industry has been treated as the cash cow of whoever seats in Miraflores. Historically, this led to the centralization of political and economic power which hindered the development of democratic institutions and left the nation at the will of the administration’s oil revenue distribution policy. Taking control of PDVSA not only meant controlling the oil industry but the state itself. Reforms should aim to break the petro-state monopoly over oil revenue and to make PDVSA part of a dynamic national industry where other participants are allowed to play.

There are multiple precedents to back this move. Lessons from the partial privatizations of Chinese SINOPEC and Norwegian Statoil from the early 2000s could be drawn to prove that these operations are possible under different political systems. A PDVSA offering would be exceptionally complex, but in order to even start considering it there are three basic fundamentals that need to align.

First, the move would need overwhelming support from civil society to sustain the necessary political will. While that looks like a concrete goal in María Corina Machado’s energy proposals, the possibility seems remote under an interim Delcy government that still needs to appease other factions within the ruling coalition. In addition, chavismo’s current leader has not adhered to international transparency standards following her 2020 appointment as acting Minister of Economy and Finance—a role that earned her the title of Venezuela’s economic vice president before taking control of the national oil industry. Her tenure overlapped with the loss of an estimated $21 billion in oil payments, a scandal that ultimately led to the arrest and scapegoating of former Oil Minister Tareck El Aissami.

Second, Petróleos de Venezuela needs a robust rule-of-law framework that can deliver credible guarantees to investors The current interim president is unlikely to provide such assurances, given the deep mistrust surrounding Venezuela’s public institutions—many of which she does not fully control. As Juan Guillermo Blanco points out, her posture may swing from alignment with Washington on this occasion to an anti-imperialist rupture if the circumstances allow it.

Shifting to global best practices

PDVSA cannot move forward without the goodwill of the market. Francisco Monaldi has repeatedly stated that the main risks of Venezuelan oil are above ground. Beyond the politics, sanctions, and the legal framework, PDVSA needs to get its house in order to regain market credibility. For starters, the holding needs to address its debt issue—estimated at $34.5b—through an agreement where debtholders walk away feeling it was a fair deal. Without serious debt restructuring, a share offering roadshow would be impossible.

The company must also cut all non-essential ventures, subsidies, and social project funding from the nucleus. From PDVAL supermarkets to F1 teams, PDVSA bankrolled it all during chavismo. Despite how bizarre the outflows party got, these types of splurges and subsidies have been ingrained in the Venezuelan mindset and will be hard to get rid of. Such measures would represent a comprehensive detachment from century-old beliefs in the magical powers of the Venezuelan petro-state.

Furthermore, PDVSA would need to cut all non-essential personnel and assets, streamlining its operations. Every dollar spent should be evaluated under a return-on-capital framework, making financial discipline central to strategic planning. In addition, investors and banking partners must be able to track every dollar. Auditable records are not only essential for building reliable financial projections but also necessary for protecting stakeholders from anticorruption liability. This underscores the need for a new framework of transparent, efficient contract allocation and fully auditable accounting trails, ensuring that financial statements can withstand market scrutiny and compliance verification.

Making an example out of Petróleos de Venezuela would help generate a spillover effect that could contribute to more transparency, financial discipline, and compliance across the domestic market.

Figures such as the “productive participation contracts” (CPPs) or joint ventures that currently dominate private investments in the industry are compatible with this model as PDVSA should seek alliances in cases where it makes financial sense to do so. However, the secrecy under which these ventures have been working on needs to end.

Finally, PDVSA will need to bring in an independent leadership team and board with enough protection to isolate operational and financial decision-making from politics. Venezuela would be represented in the board as the majority shareholder, but would be restrained from running the day-to-day business operations and resource allocation. Studies that examine initial offerings of National Oil Companies (NOC) suggest that a substantial amount of the efficiency gains are delivered before an IPO is launched, as the company restructures itself to be introduced into the public market. PDVSA has a long way to go before we can consider this scenario. Nevertheless, aiming toward partial privatization would provide a blueprint for rebuilding PDVSA as an operationally, financially, and commercially viable company.

A share offering should consider a dual listing that includes the Caracas Stock Exchange, which is also in need of an extreme makeover (that’s part of a different discussion, however). The overhaul needed is not only about getting barrels out of the ground, but about including the company in the wider economy and making it subject to the highest managerial and corporate governance standards. Making an example out of Petróleos de Venezuela would help generate a spillover effect that could contribute to more transparency, financial discipline, and compliance across the domestic market. Ultimately, this would constrain the government’s ability to overreach into the private sector.

Whichever path is chosen for the future of PDVSA and the Venezuelan oil industry, it should be preceded by an inclusive debate that considers implications beyond the industry itself and sets the country on a sustainable growth path. This debate must happen in public, in conditions of full political and economic freedom, free from coercion by either internal or external powers. It should be the opposite of what occurred prior to the swift approval of the new Hydrocarbons Law, when secrecy prevailed and the legislative body responsible for drafting the statute showed no significant deliberation.

The one-sided vote in the illegitimate 2025 National Assembly should not overshadow the legislature’s failure to comply with its own parliamentary rules during the bill’s passage, as purported opposition lawmakers reportedly received a copy of the draft only hours before the first debate. That episode underscores why the legal and constitutional reforms needed to break the petro-state and refound PDVSA can only follow the renewal of all institutions, including a truly multiparty, independent congress.

The end goal is simple, yet history-changing: to dismantle Miraflores’ total control and discretion over oil-industry revenues.

Photograph by unknown author. “Trabajadores petroleros,” Fernando Irazábal Collection. Compiled by Archivo Fotografía Urbana.

On January 29, Venezuela experienced a legislative tectonic shift regarding the future of its hydrocarbon sector. The National Assembly approved a new petroleum law that effectively breaks with the post-1976 tradition of rigid state control, opening participation across the full value chain to private oil companies. 

This is not the first experiment with private participation since nationalization, but it is the clearest attempt since the 1990s Apertura to normalize it as the governing framework of the sector. The legislation, approved with striking speed and opacity, has elicited mixed reactions, ranging from denunciations of lost sovereignty and surrender to foreign interests to support for a first step that still requires major fixes. Despite these divergences, one thing is clear: the return of private companies to Venezuela’s oil sector inevitably revives parallels with the concessionary system under which the industry was born and flourished between 1914 and 1976, a mirror of what Venezuela’s energy sector could become in the twenty-first century.

The 1943 and 2026 hydrocarbons laws

The iconic 1943 bill enacted by President Isaías Medina Angarita (1941–1945) regulated Venezuela’s privately run oil industry until the 1976 nationalization. It became the institutional template of the concessionary era: a rules-and-taxes state overseeing a privately operated industry. Together with related legislation, it established the famous 50/50 profit-sharing arrangement with the state, later tightened by reforms. Yet within the 1943 framework, the rentier state largely confined itself to setting the rules and collecting taxes and rents, while private companies assumed the capital risks. There was no government monopoly over day-to-day operations.

In spirit, the 2026 law reintroduces comparable conditions for private capital. Petroleum companies can now either hold operational control in joint ventures with the state or carry out activities independently through government contracts. The 1943 and 2026 frameworks also embrace flexible royalty schemes that prioritize business viability over rigid tax burdens. Differences, of course, abound. To mention a few, the 2026 version concentrates discretionary power in the executive branch regarding royalties, opens the possibility of international arbitration outside the country, simplifies the tax burden into a 15% integrated hydrocarbons tax, and diminishes the National Assembly’s authority over oil business.

The Venezolanization pioneered by firms like the Creole Petroleum Corporation, Royal Dutch Shell, Mene Grande Oil Company, and many others also became an exercise in social integration.

Divergences aside, both pieces of legislation share the same underlying imperative: attracting capital and technology. The 1976 and 2001 hydrocarbons laws, by contrast, were designed precisely to limit private initiative. But investment alone will not do all the work. Human capital is also desperately needed to lead a reborn hydrocarbon sector, and here the concessions model offers valuable lessons.

The Venezolanization of the industry

An underappreciated dimension of that era was human capital development. Over decades, foreign firms trained Venezuelans across the corporate hierarchy—in technical, managerial, and executive roles—so that by the mid-1970s expatriates were a small fraction of the workforce and Venezuelans increasingly ran the day-to-day business. This created a pipeline of local talent able to inherit operational responsibility and manage the 1976 transition to state control with unusual continuity.

This history is not nostalgia for a bygone era, but a lesson worth highlighting. Venezuela’s oil collapse in this century is inseparable from the degradation of corporate culture and human capital, deepened by the politicization of the industry. It triggered a professional brain drain and the hollowing out of operational efficiency. Multinationals like Chevron, and others that may follow, should explicitly lean on a “Venezolanization 2.0” that engages local talent still in the country and encourages the return of a diaspora of Venezuelan managers and engineers now abroad. Insulating the sector from partisan hiring and purging is essential if these cadres are to operate with full competence.

The Venezolanization pioneered by firms like the Creole Petroleum Corporation, Royal Dutch Shell, Mene Grande Oil Company, and many others also became an exercise in social integration. Many American expatriates, like Creole’s CEO Arthur T. Proudfit, embraced the social milieu of the country that welcomed them, often learning the language and speaking it fluently; his daughter even married a local businessman. In exchange, Venezuelans trained abroad and working for these firms absorbed US professional values and traditions. This cultural exchange helped forge durable bonds between both countries and contributed to the successful presence of foreign capital in Venezuela. And these corporations did not stop at their payrolls. They understood that long-term success in the hydrocarbon sector extended beyond employees to the surrounding communities of the oil fields, and beyond.

Social license

Creole, Shell, and Mene Grande undertook significant investments in the country. In the oilfields, they negotiated lucrative labor contracts with unions. They also financed hospitals, university campuses, and other infrastructure projects. These firms even joined the state in ventures like the Venezuelan Basic Economy Corporation to fund agro-industrial projects aimed at diversifying the economy, while supporting rural communities through initiatives such as the American International Association. They left an indelible imprint on everyday life, from how Venezuelans shopped through market chains like CADA, to culture through documentaries, corporate magazines, and even TV news programs like Observador Creole.

More importantly, they built alliances with domestic capitalists like Eugenio Mendoza to address social problems. Creole and Venezuelan business leaders, for instance, institutionalized private-sector social action through organizations like the Dividendo Voluntario para la Comunidad (DVC), founded in 1964 to mobilize corporate contributions toward community projects. This nonprofit continues to exist today, fulfilling the original goal of social action bequeathed by American and Venezuelan businessmen more than sixty years ago. Creole also created the Creole Development Corporation, a financial arm designed to provide seed capital for local entrepreneurial activity. This was hardly a frictionless era, but it shows how legitimacy was treated as a condition of stability.

Contributions to health, schools, and infrastructure would also ease the state’s burden and allow it to focus on critical nation-building emergencies.

This largesse reached widely, but it was not mere corporate charity. To avoid jeopardizing their operations and invite nationalist backlash, companies engaged with surrounding communities and invested in their future. That is a lesson new capital arriving in Venezuela should pursue. There is even generational memory favorable to the presence of these firms in oil communities. 

Leveraging that legacy could open renewed opportunities for local professional growth while strengthening bonds between communities and multinationals. Contributions to health, schools, and infrastructure would also ease the state’s burden and allow it to focus on critical nation-building emergencies: democratizing institutions, reconstructing the economy, and addressing the public services and humanitarian needs the population faces.

A spiritual return to the concessions system?

The new hydrocarbons law pushes Venezuela’s oil industry in a new direction, and it functions as a first step in the right path. However, there is room for significant improvement. 

Moreover, key questions remain unanswered. For instance, what will be the fate of PDVSA? Any plan that fails to address the resurrection of its operational capabilities undermines the development of an efficient sector. Only the re-democratization of the country can properly confront the deeper failings reflected in the current legislation. Many industry experts have already proposed an alternative framework that would solve several of the bill’s core problems by establishing clear rules, transparency mechanisms, and a dedicated government agency entrusted with regulating the hydrocarbon sector.

The spirit of the concessionary model walks once more around Venezuela’s refineries, port terminals, and petroleum wells. It is too soon to tell whether foreign capital will return with the same excitement it brought more than a century ago, or whether the scale of investments and engagement with surrounding communities will match that of its predecessors. The sector can either become a platform for institutional rebuilding and professionalization, or another discretionary channel for rents and corruption. 

Democracy, check and balances, and clear rules can turn the 2026 hydrocarbons law (and its potential future modifications) into enduring principles for the remainder of the century. If so, the oil industry might unlock a new period of prosperity. Much remains to be done to materialize that future, but what is undeniable is that a new era begins.

New Delhi, India – When US President Donald Trump announced a trade deal with India on Monday this week, he declared that New Delhi would pivot away from Russian energy as part of the agreement.

Indian Prime Minister Narendra Modi, Trump said, had promised to stop buying Russian oil, and instead buy crude from the United States and from Venezuela, whose president, Nicolas Maduro, was abducted by US special forces in early January. Since then, the US has effectively taken control of Venezuela’s mammoth oil industry.

In return, Trump dialled down trade tariffs on Indian goods from an overall 50 percent to just 18 percent. Half of that 50 percent tariff was levied last year as punishment for India buying Russian oil, which the White House maintains is financing Russian President Vladimir Putin’s war in Ukraine.

But since Monday, India has not publicly confirmed that it has committed to either ceasing its purchase of Russian oil or embracing Venezuelan crude, analysts note. Dmitry Peskov, a Kremlin spokesperson, told reporters on Tuesday that Russia had received no indication of this from India, either.

And switching from Russian to Venezuelan oil will be far from straightforward. A cocktail of other factors – shocks to the energy market, costs, geography, and the characteristics of different kinds of oil – will complicate New Delhi’s decisions about its sourcing of oil, they say.

So, can India really dump Russian oil? And can Venezuelan crude replace it?

What is Trump’s plan?

Trump has been pressuring India to stop buying Russian oil for months. After Russia invaded Ukraine in 2022, the US and European Union placed an oil price cap on Russian crude in a bid to limit Russia’s ability to finance the war.

As a result, other countries including India began buying large quantities of cheap Russian oil. India, which before the war sourced only 2.5 percent of its oil from Russia, became the second-largest consumer of Russian oil after China. It currently sources around 30 percent of its oil from Russia.

Last year, Trump doubled trade tariffs on Indian goods from 25 percent to 50 percent as punishment for this. Later in the year, Trump also imposed sanctions on Russia’s two biggest oil companies – and threatened secondary sanctions against countries and entities that trade with these firms.

Since the abduction of Maduro by US forces in early January, Trump has effectively taken over the Venezuelan oil sector, controlling sales cash flows.

Venezuela also has the largest proven oil reserves in the world, estimated at 303 billion barrels, more than five times larger than those of the US, the world’s largest oil producer.

But while getting India to buy Venezuelan oil makes sense from the US’s perspective, analysts say this could be operationally messy.

How much oil does India import from Russia?

India currently imports nearly 1.1 million barrels per day (bpd) of Russian crude, according to analytics company Kpler. Under Trump’s mounting pressure, that is lower than the average 1.21 million bpd in December 2025 and more than 2 million bpd in mid-2025.

One barrel is equivalent to 159 litres (42 gallons) of crude oil. Once refined, a barrel typically produces about 73 litres (19 gallons) of petrol for a car. Oil is also refined to produce a wide variety of products, from jet fuel to household items including plastics and even lotions.

Has India stopped Russian oil purchases?

India has reduced the amount of oil it buys from Russia over the past year, but it has not stopped buying it altogether.

Under increasing pressure from Trump, last August, Indian officials called out the “hypocrisy” of the US and EU pressuring New Delhi to back off from Russian crude.

“In fact, India began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict,” Randhir Jaiswal, India’s Foreign Ministry spokesperson, said then. He added that India’s decision to import Russian oil was “meant to ensure predictable and affordable energy costs to the Indian consumer”.

Despite this, Indian refiners, currently the second-largest group of buyers of Russian oil after China, are reportedly winding up their purchases after clearing current scheduled orders.

Major refiners like Hindustan Petroleum Corporation Ltd (HPCL), Mangalore Refinery and Petrochemicals Ltd (MRPL), and HPCL-Mittal Energy Ltd (HMEL) halted purchasing from Russia following the US sanctions against Russian oil producers last year.

Other players like Indian Oil Corporation (IOC), Bharat Petroleum Corporation, and Reliance Industries will soon stop their purchases.

What happens if India suddenly stops buying Russian oil?

Even if India wanted to stop importing Russian oil altogether, analysts argue it would be extremely costly to do so.

In September last year, India’s oil and petroleum minister, Hardeep Singh Puri, told reporters that it would also sharply push up energy prices and fuel inflation. “The world will face serious consequences if the supplies are disrupted. The world can’t afford to keep Russia off the oil market,” Puri said.

Analysts tend to agree. “A complete cessation of Indian purchases of Russian oil would be a major disruption. An immediate halt would spike global prices and threaten India’s economic growth,” said George Voloshin, an independent energy analyst based in Paris.

Russian oil would likely be diverted more heavily towards China and into “shadow” fleets of tankers that deliver sanctioned oil secretly by flying false flags and switching off location equipment, Voloshin told Al Jazeera. “Mainstream tanker demand would shift toward the Atlantic Basin, most likely increasing global freight rates as a result,” he noted.

Sumit Pokharna, vice president at Kotak Securities, noted that Indian refineries have reported robust margins in the last two years, majorly benefitting from the discounted Russian crude.

“If they move to higher-costing, like the US or Venezuela, then raw material cost would increase, and that would squeeze their margins,” he told Al Jazeera. “If it goes beyond control, they may have to pass the excess onto consumers.”

Can India stop buying Russian oil altogether?

It may not be able to. One of India’s two private refiners, Nayara Energy, is majority-Russian-owned and under heavy Western sanctions. The Russian energy firm Rosneft holds a 49.13 percent stake in the company, which operates a 400,000-barrel-per-day refinery in India’s Gujarat, PM Modi’s home state.

Nayara is the second-largest importer of Russian crude, buying about 471,000 barrels per day in January this year, accounting for nearly 40 percent of Russian supplies to India.

Its plant has relied solely on Russian crude since European Union sanctions were imposed on the company last July.

Nayara is not planning to load Russian oil in April as it shuts its refinery for more than a month for maintenance from April 10, according to Reuters.

Pokharna said the future of Nayara hangs in the balance, with the US unlikely to grant India an overt exemption for the Russia-backed company to import crude.

Can India switch to Venezuelan oil?

India has been a major consumer of Venezuelan oil in the past. At its peak, in 2019, India imported $7.2bn of oil, accounting for just under 7 percent of total imports. That stopped after the US slapped sanctions on Venezuelan oil, but some officials of the government-owned Oil and Natural Gas Corporation are still stationed in the Latin American country.

Now, major Indian refiners have said they are open to receiving Venezuelan oil again, but only if it is a viable option.

For one thing, Venezuela is roughly twice as far from India as Russia and five times further than the Middle East, meaning much higher freight costs.

Venezuelan oil is more expensive as well. “Russian Urals [a medium-heavy crude blend] has been trading at a wide-ranging discount of about $10-20 per barrel to Brent, while Venezuelan Merey currently offers a smaller discount of around $5-8 per barrel,” Voloshin told Al Jazeera.

“Importing from Venezuela and forgoing the Russian discount would be a costly affair for India,” said Pokharna. “From transportation cost to forgoing discounts, it could cost India $6-8 more per barrel – and that is a huge increase in the importing bill.”

Overall, a complete pivot away from Russia could raise India’s import bill by $9bn to $11bn – an amount roughly equal to India’s federal health budget – per year, according to Kpler.

“Venezuelan crude must be discounted by at least $10 to $12 per barrel to be competitive,” argued Voloshin. “This deeper discount is necessary to offset the much higher freight costs, increased insurance premiums for the longer Atlantic voyage, and the somewhat higher operational expenses required to process Venezuela’s extra-heavy high-sulfur crude.”

Without deeper discounts, the longer journey and complex handling make Venezuelan oil more expensive on a delivered basis, he added.

Another major issue is that many Indian refiners simply do not have the facilities to process very heavy Venezuelan oil.

Venezuelan crude is a heavy, sour oil, thick and viscous like molasses, with a high sulphur content requiring complex, specialised refineries to process it into fuel. Only a small number of Indian refineries are equipped to handle it.

“[Venezuelan oil’s heaviness] makes it an option only for complex refineries, leaving out older and smaller refineries,” Pokharna told Al Jazeera. “The shift is operationally difficult and would require blending with more expensive light crudes.”

Then there is the question of availability. Today, Venezuela produces barely a million barrels per day when pushed to its limit. Even if all production was sent to India, it would not match the total Russian oil import.

Where else could India buy oil?

India’s Minister Puri has said that New Delhi is looking to diversify sourcing options from nearly 40 countries.

As India has reduced Russian imports, it has increased them from Middle Eastern nations and other countries in the Organization of the Petroleum Exporting Countries (OPEC). Now, while Russia accounts for nearly 27 percent share in India’s oil imports, OPEC nations, led by Iraq and Saudi Arabia, contribute 53 percent.

Reeling from Trump’s trade war, India has also increased purchases of US oil. American crude imports to India rose by 92 percent from April to November in 2025 to nearly 13 million tons, compared to 7.1 million in the same period in 2024.

However, India would be competing for these supplies with the European Union, which has pledged to spend $750bn by 2028 on US energy and nuclear products.

Meanwhile, for Venezuela to return to higher production, Caracas needs political stability, changes in foreign investment and oil laws, and to clear debts. That will take time, experts say.

Oil becomes more meaningful when you turn it into fuel.

A barrel contains 159 litres of crude oil, or 42 gallons.

To use this oil, it must be refined. The refining process produces various products, including petrol, diesel, jet fuel and numerous household items, such as cleaning products, plastics and even lotions.

Once refined, a barrel typically produces about 73 litres, or 19.35 gallons, of petrol to power cars and trucks.

A pick-up truck that can drive 24 miles on 1 gallon of petrol, or 100km on 10 litres, can travel about 730km, or 450 miles, from one barrel of oil.

Put another way, one barrel of crude oil can fuel that pick-up on a trip from New York City to Cleveland, Ohio.

Now let’s scale that up to US national consumption. According to the US Energy Information Administration, the US has about 285 million motor vehicles and consumes nearly 9 million barrels of petrol every day.

If all of Venezuela’s crude oil were refined into petrol, it could supply US vehicles for roughly 40 years at today’s consumption rate.

Cuban diplomat says Havana is ready for dialogue with Washington, but certain things are off the table, including the constitution and its socialist government.

Cuba and the United States are in communication, but the exchanges have not yet evolved into a formal “dialogue”, a Cuban diplomat has said, as US President Donald Trump stepped up pressure on Havana.

Carlos Fernandez de Cossio, Cuba’s deputy foreign minister, told the Reuters news agency on Monday that the US government was aware that Cuba was “ready to have a serious, meaningful and responsible dialogue”.

De Cossio’s statement represents the first hint from Havana that it is in contact with Washington, even if in a limited fashion, as tensions flared in recent weeks amid Trump’s threats against the Cuban government in the aftermath of the US military’s abduction of Venezuelan leader Nicolas Maduro, Cuba’s longstanding ally.

“We have had exchange of messages, we have embassies, we have had communications, but we cannot say we have had a table of dialogue,” de Cossio said.

In a separate interview with The Associated Press news agency, De Cossio said, “If we can have a dialogue, maybe that can lead to negotiation.”

The deputy minister also stressed that certain issues are off the table for Cuba, including the country’s constitution, economy, and its socialist system of government.

On Sunday, Trump indicated that the US had begun talks with “the highest people in Cuba”.

“I think we’re going to make a deal with Cuba,” Trump told reporters at his Mar-a-Lago estate in Florida.

Days earlier, Trump had referred to Cuba in an executive order as “an unusual and extraordinary threat” to US national security, and warned other countries he would impose more tariffs on them if they supplied oil to Cuba.

On Monday, Trump reverted to issuing threats to Havana, announcing at the White House that Mexico “is going to cease” sending oil to Cuba, a move that could starve the country of its energy needs.

Mexico, which has yet to comment on Trump’s latest statement, is the largest supplier of oil to Cuba.

Mexico had repeatedly said that it would not stop shipping oil to Cuba for humanitarian reasons, but also expressed concern that it could face reprisals from Trump over its policy.

In recent weeks, the US has moved to block all oil from reaching Cuba, including from Cuba’s ally Venezuela, pushing up prices for food and transportation and prompting severe fuel shortages and hours of blackouts, even in the capital, Havana.

Responding to Trump’s threat regarding oil supplies, Cuba’s De Cossio said that the move would eventually backfire.

“The US… is attempting to force every country in the world not to provide fuel to Cuba. Can that be sustained in the long run?” de Cossio said to Reuters.

The US has imposed decades of crushing sanctions on Cuba, but a crippling economic crisis on the island and stepped-up pressure from the Trump administration have recently brought the conflict to a head.

It all started with a direct US attack on Venezuela earlier this month.

Back then, US President Donald Trump made it clear that he was only interested in the country’s substantial oil reserves.

On Thursday, the government in Caracas announced a massive overhaul of the petroleum sector.

Venezuela’s interim president has signed a law easing state control and opening the door for private firms to invest in the country.

For many, it paves the way for US oil giants to return to Venezuela with significant investments.

But who will stand to gain from the changes, Venezuela or the United States? Or both?

Presenter: Adrian Finighan

Guests

Elias Ferrer – founder and director of Orinoco Research

Andrew Lipow – president of Lipow Oil Associates

Phil Gunson – senior analyst at the International Crisis Group

Caracas, January 30, 2026 (venezuelanalysis.com) – The Venezuelan National Assembly has approved a sweeping reform of the country’s 2001 Hydrocarbon Law that rolls back the state’s role in the energy sector in favor of private capital.

Legislators unanimously endorsed the bill at its second discussion on Thursday, with only opposition deputy Henrique Capriles abstaining. The legislative overhaul follows years of US sanctions against the Venezuelan oil industry and a naval blockade imposed in December.

National Assembly President Jorge Rodríguez hailed the vote a “historic day” and claimed the new bill will lead oil production to “skyrocket.” 

“The reform will make the oil sector much more competitive for national and foreign corporations to extract crude,” he told reporters. “We are implementing mechanisms that have proven very successful.”

Venezuelan Acting President Delcy Rodríguez signed and enacted the law after the parliamentary session, claiming that the industry will be guided by “the best international practices” and undertake a “historic leap forward.”

Former President Hugo Chávez revamped the country’s oil legislation in 2001 and introduced further reforms in 2006 and 2007 to assert the Venezuelan state’s primacy over the industry. Policies included a mandatory stakeholding majority for state oil company PDVSA in joint ventures, PDVSA control over operations and sales, and increased royalties and income tax to 30 and 50 percent, respectively. Increased oil revenues bankrolled the Venezuelan government’s expanded social programs in the 2000s.

The text approved during Thursday’s legislative session, following meetings between Venezuelan authorities and oil executives, went further than the draft preliminarily endorsed one week earlier.

The final version of the legislation establishes 30 percent as an upper bound for royalties, with the Venezuelan government given the discretionary power to determine the rate for each project. A 33 percent extraction tax in the present law was scrapped in favor of an “integrated hydrocarbon tax” to be set by the executive with a 15 percent limit.

Similarly, the Venezuelan government can reduce income taxes for companies involved in oil activities while also granting several other fiscal exemptions. The bill cites the “need to ensure international competitiveness” as a factor to be considered when decreasing royalty and tax demands for private corporations.

The reform additionally grants operational and sales control to minority partners and private contractors. PDVSA can furthermore lease out oilfields and projects in exchange for a fixed portion of extracted crude. The new legislation likewise allows disputes to be settled by outside arbitration instances.

Thursday’s legislative reform was immediately followed by a US Treasury general license allowing US corporations to re-engage with the Venezuelan oil sector.

General License 46 (GL46) authorizes US firms to purchase and market Venezuelan crude while demanding that contracts be subjected to US jurisdiction so potential disputes are referred to US courts. The license bars transactions with companies from Russia, Iran, North Korea, or Cuba. Concerning China, it only blocks dealings with Venezuelan joint ventures with Chinese involvement.

Economist Francisco Rodríguez pointed out that the sanctions waiver does not explicitly allow for production or investment and that companies would require an additional license before signing contracts with Venezuelan authorities.

GL46 also mandates that payments to blocked agents, including PDVSA, be made to the US Foreign Government Deposit Funds or another account defined by the US Treasury Department.

Following the January 3 military strikes and kidnapping of Venezuelan President Nicolás Maduro, the Trump administration has vowed to take control of the Venezuelan oil industry by administering crude transactions. Proceeds from initial sales have been deposited in US-run bank accounts in Qatar, with a portion rerouted to Caracas for forex injections run by private banks. US Secretary of State Marco Rubio vowed that the resources will begin to be channeled to US Treasury accounts in the near future.

In a press conference on Friday, Trump said his administration is “very happy” with the actions of Venezuelan authorities and would soon invite other countries to get involved in the Caribbean nation’s oil industry. Rubio had previously argued that Caracas “deserved credit” for the oil reform that “eradicates Chávez-era restrictions on private investments.”

Despite the White House’s calls for substantial investment, Western oil corporations have expressed reservations over major projects in the Venezuelan energy sector. Chevron, the largest US company operating in the country, stated that it is looking to fund increased production with revenues from oil sales as opposed to new capital commitments.

Since 2017, Venezuela’s oil industry has been under wide-reaching US unilateral coercive measures, including financial sanctions and an export embargo, in an effort to strangle the country’s most important revenue source. The US Treasury Department has also levied and threatened secondary sanctions against third-country companies to deter involvement in the Venezuelan petroleum sector.

Venezuela’s interim President Delcy Rodriguez has signed into law a reform bill that will pave the way for increased privatisation in the South American country’s nationalised oil sector, fulfilling a key demand from her United States counterpart, Donald Trump.

On Thursday, Rodriguez held a signing ceremony with a group of state oil workers. She hailed the reform as a positive step for Venezuela’s economy.

“We’re talking about the future. We are talking about the country that we are going to give to our children,” Rodriguez said.

The ceremony came within hours of the National Assembly – dominated by members of Rodriguez’s United Socialist Party – passing the reform.

“Only good things will come after the suffering,” said Jorge Rodriguez, the assembly’s head and brother of the interim president.

Since the US military’s abduction of Venezuela’s former leader Nicolas Maduro and his wife Cilia Flores on January 3, the Trump administration has sought to pressure President Rodriguez to open the country’s oil sector to outside investment.

Trump has even warned that Rodriguez could “pay a very big price, probably bigger than Maduro”, should she fail to comply with his demands.

Thursday’s legislation will give private firms control over the sale and production of Venezuelan oil.

It would also require legal disputes to be resolved outside of Venezuelan courts, a change long sought by foreign companies, who argue that the judicial system in the country is dominated by the ruling socialist party.

The bill would also cap royalties collected by the government at 30 percent.

While Rodriguez signed the reform law, the Trump administration simultaneously announced it would loosen some sanctions restricting the sale of Venezuelan oil.

The Department of the Treasury said it would allow limited transactions by the country’s government and the state oil company PDVSA that were “necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil, by an established US entity”.

Previously, all of Venezuela’s oil sector was subject to sweeping US sanctions imposed in 2019, under Trump’s first term as president.

Thursday’s suite of changes is designed to make Venezuela’s oil market more appealing to outside petroleum firms, many of whom remain wary of investing in the country.

Under Maduro, Venezuela experienced waves of political repression and economic instability, and much of his government remains intact, though Maduro himself is currently awaiting trial in a New York prison.

His abduction resulted in dozens of deaths, and critics have accused the US of violating Venezuelan sovereignty.

Venezuela nationalised its oil sector in the 1970s, and in 2007, Maduro’s predecessor, Hugo Chavez, pushed the government to increase its control and expropriate foreign-held assets.

Following Maduro’s abduction, Trump administration officials have said that the US will decide to whom and under what conditions Venezuelan oil is sold, with proceeds deposited into a US-controlled bank account.

Concerns about the legality of such measures or the sovereignty of Venezuela have been waved aside by Trump and his allies, who previously asserted that Venezuelan oil should “belong” to the US.

Caracas, January 29, 2026 (venezuelanalysis.com) – US Secretary of State Marco Rubio defended the Trump administration’s January 3 attack on Venezuela and kidnapping of President Nicolás Maduro during a Senate hearing on Wednesday.

“[Having Maduro in power] was an enormous strategic risk for the United States,“ Rubio said in his testimony to the Senate Committee on Foreign Relations. “It was an untenable situation, and it had to be addressed.”

The Trump official claimed that the military operation aimed to “aid law enforcement” and did not constitute an act of war. He likewise emphasized the White House’s concern about Venezuela allegedly being a “base of operations” for US geopolitical rivals Iran, Russia, and China.

Rubio faced criticism from multiple senators, with Rand Paul arguing that the White House would consider a similar attack directed against the US as an act of war. Despite widespread criticism from Democrats and a handful of Republicans, efforts to pass War Powers resolutions have been narrowly defeated in both the Senate and the House of Representatives.

Maduro and First Lady Cilia Flores pleaded not guilty to charges including drug trafficking conspiracy in a New York federal court on January 5. US officials have never presented evidence tying high-ranking Venezuelan leaders to narcotics activities, and specialized agencies have consistently found the Caribbean nation to play a marginal role in global drug trafficking.

The Venezuelan government, led by Acting President Delcy Rodríguez, has repeatedly denounced the US attack and demanded the release of Maduro and Flores. At the same time, Rodríguez and other officials have advocated for renewed diplomatic engagement to settle “differences” with Washington.

The January 3 strikes, which killed 100 people, have drawn widespread condemnation in Latin America and beyond. A recent Progressive International summit in Colombia called for a joint regional response against US aggression.

During Wednesday’s hearing, Rubio reiterated the US government’s plans to control the Venezuelan oil sector and impose conditions on the acting Rodríguez administration. He added that the White House is seeking stability in the South American country ahead of a “democratic transition.”

Rubio additionally confirmed that Washington is administering Venezuelan oil sales, with proceeds deposited in US-controlled bank accounts in Qatar before a portion is rerouted to Caracas. He added that at some point the funds will run through Treasury Department accounts in the United States.

Democratic senators questioned the legality and transparency of the present arrangement. The Secretary of State further claimed that Caracas would need to submit a “budget request” before accessing its funds.

The initial deal reportedly comprised some 50 million barrels of oil, worth around $2 billion, that had accumulated due to a US naval blockade of Venezuelan exports. After a reported $300 million were turned over to Venezuelan private banks last week, the Venezuelan Central Bank announced that a further $200 million will be made available in early February.

Venezuelan banks are offering the foreign currency in auction to customers, with officials vowing  priority for imports in the food and healthcare sectors. 

According to Reuters, the US Treasury Department is preparing a general license to allow select corporations to engage in oil dealings with Caracas. Since 2017, the Venezuelan oil industry has been under wide-reaching unilateral coercive measures, including financial sanctions, an export embargo, and secondary sanctions.

In his address, Rubio went on to state that Venezuelan authorities “deserve credit for eradicating Chávez-era restrictions on private investment” in the oil industry, in reference to a recent overhaul of the country’s 2001 Hydrocarbons preliminarily approved last week. He added that a portion of oil revenues will be used for imports from US manufacturers.

On Tuesday, Acting President Rodríguez announced during a televised broadcast that Venezuela was importing medical equipment from the US using “unblocked funds.” 

The Venezuelan leader emphasized the importance of relations based on mutual respect with the US and rejected claims that her government is subject to dictates from foreign actors. She affirmed that there are open “communication channels” with the Trump administration and collaboration with Rubio on a “working agenda.”

The acting authorities in Caracas have sought to promote a significant rebound of crude production by offering expanded benefits to private investors as part of the reform bill. Expected to be finally approved in the coming weeks, the new law abrogates provisions introduced under former President Hugo Chávez to ensure majority state control over the oil sector in favor of flexible arrangements granting substantial autonomy to corporate partners.

Published on
29/01/2026 – 12:38 GMT+1

Oil prices rose on Thursday after US President Donald Trump warned Iran that “time is running out” and said a “massive armada” was heading towards the region if Tehran failed to agree to a nuclear non-proliferation deal.

In a Truth Social post, Trump said a fleet larger than the one sent to Venezuela was ready to “rapidly fulfil its mission, with speed and violence, if necessary” if Iran refused to negotiate a deal guaranteeing “no nuclear weapons”.

Global benchmark Brent rose by about 2.02%, trading at around $68.73 per barrel, while US crude (WTI) hovered around 2.15% higher, at $64.57 per barrel.

Trump previously threatened to attack Iran if it killed protesters during the ongoing protest movement across the country. Estimates of those killed range from around 6,000 to as many as 30,000, according to various reports.

Oil delivery disruptions

If the US were to escalate militarily, it could disrupt oil flows to countries that still trade with Iran.

Iran’s economy is already under heavy pressure from US secondary financial sanctions on its banking and energy sectors, compounded by the reimposition of JCPOA snapback sanctions.

These measures have severely limited Iran’s access to the Western financial system and constrained its ability to trade openly.

As a result, Iranian exports rely heavily on so-called “dark fleets,” ship-to-ship transfers and intermediary routes designed to obscure cargo origins along major maritime corridors.

Yet despite years of sanctions, Iran has retained access to oil markets, underlining the difficulty of fully enforcing restrictions on a high-value global commodity.

“Iran has a number of markets for its oil, despite the Western sanctions regime,” said Dmitry Grozubinski, a senior advisor on international trade policy at Aurora Macro Strategies.

China at centre of enforcement risk

China remains the largest buyer, with reports suggesting Iranian crude is often rebranded as Malaysian or Gulf-origin oil before entering the country.

“Independent refineries are purchasing it using dark fleet vessels, with transactions conducted through small private banks and in renminbi,” Grozubinski said.

Other destinations for Iranian oil and derivatives include Iraq, the UAE and Turkey, further complicating enforcement.

“It’s extremely difficult to maintain comprehensive sanctions on oil,” Grozubinski said, “especially when it requires policing transactions between Iran and states that don’t fully share Western priorities.”

China currently imports an estimated 1.2 to 1.4 million barrels of Iranian oil per day — around 80 to 90% of Iran’s crude exports.

US escalation could provoke Beijing

That dependence makes Beijing the central variable in any escalation. Analysts say China would be the most likely major economy to resist compliance and retaliate.

“Beijing has already signalled it would respond if Trump follows through,” said Dan Alamariu, chief geopolitical strategist at Alpine Macro, warning of renewed US–China trade friction.

One risk raised by analysts is the potential for China to again restrict exports of rare earths — a tool it has previously used during periods of trade tension — although such a move is considered unlikely in the short term.

“It’s not the base case,” Alamariu said, “but it’s not impossible.”

The president says Mexico’s decision ‘to sell or give oil to Cuba for humanitarian reasons’ was a ‘sovereign’ one.

Mexican President Claudia Sheinbaum says her country will continue to show “solidarity” with Cuba after media reports that her government halted a shipment of oil to Havana.

Mexico has in recent years become a top supplier of oil to Cuba, which relies on cut-price oil supplies from its allies to survive a US trade embargo and keep the lights on through a severe energy crisis.

Venezuela had been a major supplier of discounted crude to Cuba, but US President Donald Trump said he would halt the shipments after the United States military abducted long-term Venezuelan President Nicolas Maduro this month.

As recently as December, Mexico was still sending oil to Cuba, but several media outlets, including Bloomberg and the Mexican newspaper Reforma, have reported that a shipment planned in January was called off.

Sheinbaum refused to confirm or deny the reports on Tuesday. She told reporters during her regular morning news conference that Mexico’s decision “to sell or give oil to Cuba for humanitarian reasons” was a “sovereign decision”.

“It is determined by [Mexican state oil company] Pemex based on the contracts, or, in any case, by the government, as a humanitarian decision to send it under certain circumstances,” Sheinbaum said.

When asked if Mexico would be resuming oil shipments to Cuba, the president sidestepped the question and said, “In any case, it will be reported”. She also said Mexico would “continue to show solidarity” with Cuba.

The Reuters news agency last week reported that the Mexican government was reviewing whether to keep sending oil to Cuba amid growing concerns within Sheinbaum’s government that continuing the shipments could put the country at odds with the US.

Trump on Tuesday told reporters that “Cuba will be failing very soon”, adding that Venezuela has ‌not ‌recently sent ⁠oil or money ‌to Cuba.

According to shipping data and internal documents from state company PDVSA, Venezuela has not sent crude or fuel to Cuba for about a month.

Last year, Mexico sent approximately 5,000 barrels per day to Cuba. With Venezuela’s shipments now offline, Mexico’s supplies are critical.

Jan. 27 (UPI) — Mexican President Claudia Sheinbaum said Tuesday that oil shipments to Cuba have been suspended, reflecting a decision made by Petróleos Mexicanos within the framework of its contractual relationship with the island.

During her morning news conference at the National Palace, Sheinbaum was asked about press reports indicating that Pemex had canceled a crude shipment bound for Cuba scheduled for January.

The president did not deny the suspension, but stressed that it is up to the state-owned company to decide when and how shipments are carried out.

“It is a sovereign decision, and it is made at the time deemed necessary,” she said when questioned about the published information.

Sheinbaum said decisions related to energy supplies to Cuba are part of Pemex’s operational and contractual assessments. She emphasized that Mexico’s policy toward the island is neither new nor exclusive to her administration.

She noted that previous governments maintained different types of energy ties with Cuba, even amid political disagreements.

“From the first blockade of Cuba, Mexico was the only country that voted against it, and since then it has maintained communication and different types of relations with the island,” she said.

The president also framed the bilateral relationship within a historical tradition of Mexican foreign policy, which has maintained ties with Cuba since the early years of the economic embargo imposed by the United States.

“Beyond positions toward whichever Cuban government is in power, the relationship is with the peoples, and that is a fundamental principle of Mexican foreign policy,” Sheinbaum said.

In that context, Sheinbaum said the economic blockade has generated supply problems on the island and that Mexico has maintained a policy of solidarity with the Cuban people over time.

She added that any future decision on resuming shipments will be communicated in a timely manner by the relevant authorities.

Asked whether Mexico could play an intermediary role between Cuba and the United States in the event of bilateral tensions, the president said such initiatives can only move forward if both parties request them, and reiterated that Mexico will continue to promote dialogue and the peaceful resolution of international differences.

Mexico consolidated its position in 2025 as Cuba’s main oil supplier, covering approximately 44% of the island’s crude imports and displacing Venezuela, with an average of more than 12,000 barrels per day.

With Venezuela’s exit as a key supplier following the capture of President Nicolás Maduro on Jan. 3 by U.S. military forces, Mexico assumed a central role in supplying the island’s energy needs.

As a result, in Cuba the decision by Mexico could have a significant impact on its already fragile energy situation, by reducing one of the external sources that had helped ease the island’s fuel deficit.

The measure could translate into increased blackouts, transportation restrictions and disruptions to key sectors such as industry and services, in a context marked by a shortage of foreign currency and difficulties accessing alternative suppliers on the international market due to the blockade that has affected the island for decades.