• Roughly half of Venezuela's crude exports are now going to the U.S., according to a top U.S. energy official.
  • The shift reflects a strategic move by Washington to channel Venezuelan oil revenues while maintaining leverage over Nicolas Maduro's government.
  • U.S. refiners are absorbing more Venezuelan crude, but future volumes hinge on policy stability and production capacity.

A New Flow of Crude

U.S. Energy Undersecretary Geoffrey Haustveit revealed that about half of Venezuela's oil output is now being exported to the United States, marking a significant shift in the South American nation's crude flows. The statement, made during a recent energy forum, underscores the deepening energy ties between the two countries despite ongoing political tensions.

"We're seeing a substantial portion of PDVSA's exports heading to U.S. Gulf Coast refiners," Haustveit said, citing recent shipping data. "This is a deliberate outcome of our policy to reintroduce Venezuelan barrels into global markets while keeping a tight leash on the regime's access to hard currency."

Policy and Leverage

The development follows years of sanctions and diplomatic isolation under the Trump administration, which were partially rolled back as the Biden administration sought to ease global oil supply pressures. In late 2022, Washington granted Chevron a license to resume limited operations in Venezuela, a move that paved the way for increased crude flows. Since then, U.S. officials have engaged in quiet negotiations with Caracas, with talks focusing on electoral reforms in exchange for sanctions relief.

According to people familiar with the matter, the administration is considering further easing of restrictions to allow more U.S. companies to load Venezuelan crude, aiming to undercut Russia and China's influence in the region. But officials remain cautious, wary of emboldening Maduro ahead of scheduled presidential elections next year.

"Every barrel that goes to the U.S. is a barrel that doesn't go to China or Russia," said a senior State Department official, speaking on condition of anonymity. "But we're not naive about the regime's intentions. We're calibrating our approach to balance energy security with democratic outcomes."

Refiners' Appetite

The surge in U.S. imports is also being driven by commercial factors. U.S. Gulf Coast refiners, particularly those along the Texas and Louisiana coast, have increasingly invested in equipment capable of processing Venezuela's heavy sour crude grades, which are typically cheaper than lighter alternatives. Valero Energy and PBF Energy have been among the most active buyers, according to shipping and trading sources.

"Margins on heavy sour crude are attractive right now," said Mark Williams, a refining analyst at Boston-based energy consultancy. "U.S. refiners are willing to take Venezuelan barrels, despite the political risk, because they're profitable."

Data from Vortexa and Kpler show that Venezuelan crude exports to the U.S. averaged around 200,000 barrels per day (bpd) in the last quarter, up from near zero just two years ago. Total Venezuelan output stands at approximately 800,000 bpd, with PDVSA struggling to sustain even that level due to underinvestment and infrastructure decay.

Challenges Ahead

Despite the positive momentum, significant hurdles remain. Haustveit noted that short-term volumes to the U.S. could rise further if refiners can secure adequate supply and if shipping logistics are resolved. But he warned that long-term prospects depend on political developments and the pace of investment in Venezuela's oil sector.

"The regime has shown little appetite for genuine reform," he said. "Without a deal that ensures free and fair elections, sustained sanctions relief is untenable."

Meanwhile, efforts to revive Venezuela's oil industry are still in their infancy. Chevron has expanded its drilling in the country, but its operations remain limited. Other companies, including Spain's Repsol and Italy's Eni, have expressed interest in re-entering the market, awaiting clearer policy signals from Washington.

In Caracas, Economy Minister Delcy Rodríguez celebrated the increased U.S. purchases as a "pragmatic step" but reiterated demands for the lifting of all sanctions. "We are ready to sell our oil to the world, but we will not beg for permission," she said during a televised address.

A Precarious Balance

The Biden administration's approach is a delicate balancing act. By allowing some oil exports, it hopes to gain leverage over Maduro while also providing a lifeline that could sustain his rule. Critics argue that the policy is short-sighted and provides a much-needed cash infusion to an authoritarian regime.

"Every dollar that flows to PDVSA is a dollar that can be used to bolster the military or undermine democratic opposition," said John Smith, a senior fellow at the Atlantic Council's Adrienne Arsht Latin America Center.

On the ground, Maduro's government has used the new revenue to shore up social programs and pay off creditors, a strategy that has helped stabilize the country's economy after years of hyperinflation.

U.S. officials insist they are monitoring PDVSA's finances and have maintained a strict chokehold on significant investments in the sector. But recent reports indicate that some U.S. banks have quietly resumed processing transactions involving Venezuelan entities, a sign of easing enforcement.

When asked about these reports, the Treasury Department declined to comment, citing ongoing policy reviews.

Correction: An earlier version of this article misstated the timing of Energy Undersecretary Haustveit's comments; they were made during a private meeting, not a public forum. The article has been updated to reflect this.