President Donald Trump said his administration is “devising a formula” to divide Venezuela’s oil revenues between the United States, oil companies and the Venezuelan people — an early, vague indication of the administration’s plan to take over the nation’s resources.
The White House has yet to lay out precisely how it intends to manage Venezuela’s oil revenues, beyond repeated claims that the U.S. will control the funds in U.S.-controlled bank accounts — claims that experts and oil analysts say are legally and practically questionable.
A senior White House official told NOTUS that the administration intends to make direct disbursements of the oil revenues from US-controlled bank accounts to Venezuela.
“We’re devising a formula,” Trump told NOTUS at a gathering of oil executives Friday at the White House. He then immediately made a loftier assertion about how the U.S. would manage Venezuelan oil revenues.
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“But it won’t be so much of a formula, it’s going to be what they need. We’re going to take care of what they need. There’ll be plenty left over. We’re going to have a lot of money left over, and the money left over is going to the United States of America, and the oil companies are going to be very happy,” Trump said.
Experts on government spending and the Venezuelan oil industry told NOTUS that the U.S. can’t directly control the revenues from Venezuela’s oil without running into several international and domestic roadblocks.
In all, the administration’s claims and the continued lack of details have led to industry-wide confusion.
“It’s a bit of a misunderstanding in the sense that the administration, from the officials, keep saying they are controlling the oil and that this is American money. It’s not the case,” said Homayoun Falakshahi, a senior commodities analyst at Kpler, a global commodity-analytics firm. “At the end of the day the oil belongs to the state of Venezuela, and the cargoes that will be shipped to the U.S. will be sold to U.S. buyers by PVDSA [Venezuela’s state-run oil company]. I fail to understand how the money actually ends up in the U.S.”
Since Nicolás Maduro, Venezuela’s ousted leader, was captured on Jan. 3, the Trump administration has repeatedly said that the United States will take Venezuela’s oil, sell it on the global market and manage the proceeds in bank accounts controlled by the administration.
At the event on Friday, Trump declared “we are open for business.”
“We want to make sure that Venezuela can survive. You know, Venezuela needs money, and we’re going to make sure that they get money, and we’re going to get money, and the oil companies are going to make something for the work they do, and they’re going to get back their money,” Trump said Friday in response to questions from NOTUS.
On Friday, an administration official confirmed to NOTUS that the plan remains for the funds from the sale of Venezuela’s oil to be transferred to bank accounts controlled by the U.S. government.
However, some statements from administration officials Friday and earlier this week seem to contradict the claim of direct control.
Both Trump and Secretary of State Marco Rubio have said that in the future, Venezuela will purchase only U.S.-made products with the revenues the country makes from their oil sales, implying Venezuelan control of the money.
On Wednesday, Sen. John Cornyn of Texas told reporters he also believes the administration’s statements about control of the money are actually about ensuring the revenues are invested in the Venezuelan people.
“They’re gonna use this national asset to help fund the Venezuelan government during the time of transition, which, I’d rather that happen than the taxpayer,” he said when asked what the Trump administration meant by describing how money would be given back to Venezuela.
Both Falakshahi at Kpler and analysts at the D.C-based energy research firm Clearview Energy Partners have assessed the administration’s statements similarly.
“We have generally interpreted the President’s past calls to ‘take the oil’ as more slogan than strategy. After all, sovereigns who control natural resources often rely on international oil companies and services outfits to monetize their assets,” analysts from Clearview wrote in a research note.
If the Trump administration does directly control the proceeds from Venezuela’s oil sales and then spends that money based on its own interests, it would likely violate appropriations law requiring Congress to dictate both the collection of revenues and how that money is spent, said Matt Glassman, an expert in congressional procedure and appropriations at Georgetown University’s Government Affairs Institute.
As long as the revenue stays in Venezuela’s treasuries, Trump directing that money diplomatically wouldn’t run into as many obstacles, Glassman said.
“For the U.S. executive to be sort of directing a foreign country to spend their money is not crazy. We lean on NATO all the time to beef up their spending,” he said.
With Trump, he noted, it’s not quite clear what the president means.
“But how much of this is actually massive historical violations of this constitution, and how much of this is Trump just clumsily overstating stuff that is, like, not that big a deal, and you don’t know the details?” Glassman said. “My belief is that Trump can say what he wants, and he likes to say stuff that puffs up his own chest.”
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