US Seizes Venezuela's Oil Revenues Post-Maduro, Plunging Nation into Economic Chaos
Venezuela's economy teeters on the brink after the United States abducted President Nicolás Maduro last Saturday, with Washington now asserting indefinite control over the country's vast oil sales the lifeline of its battered finances.
The Trump administration moved swiftly. On Wednesday, US Energy Secretary Chris Wright announced that the US would market Venezuela's stockpiled sanctioned oil and dictate all future sales. Proceeds will flow into US Treasury accounts, split between Washington and Caracas, though details on the division remain murky. This follows a deal allowing up to $2 billion in Venezuelan crude exports to the US, involving 30-50 million barrels.
Demonstrators in Caracas rallied in support of the ousted leader on January 7, but locals already face soaring prices for essentials. Nearly 80% of Venezuela's budget funds social spending, and experts predict rapid cuts could ignite unrest.
Analysts Weigh Sanctions Relief and Investment Hopes
Relief from US sanctions could stabilize the economy, alongside smoother US ties with Maduro's interim replacements. Oil remains central: Venezuela holds the world's largest reserves but pumps just 1 million barrels per day (bpd), a fraction of its 1990s peak of 3.5 million bpd.
Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, expects gradual easing of import bans and licenses for US firms to inject capital and expertise. President Trump claims US oil companies stand ready with billions in investments. Yet Ziemba cautions that some sanctions will linger, and revenue-sharing gaps could persist.
Uncertainty Clouds Revival Prospects
Skeptics abound. Cynthia Arnson of Johns Hopkins School of Advanced International Studies calls major US oil investments a "myth" without proven stability firms avoid risky bets in turmoil. Tim Hunter of Oxford Economics highlights the social spending crunch, warning of "very quick knock-on consequences" like unrest.
Benjamin Radd from UCLA's Burkle Center stresses that reviving output demands massive infrastructure overhauls, years away at best. Trump's vow to "run" Venezuela's energy sector lacks specifics, and the interim government's legitimacy and autonomy hangs in doubt, unlike post-invasion purges elsewhere.
As prices spike and funds dry up, Venezuela faces a grim interlude before any oil-fueled rebound. "There are a lot of unknowns," Radd said.
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