House Democrats Warn Oil Companies of Venezuelan Risks

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land Texas)

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Summary

President Donald Trump has welcomed oil executives to the White House to discuss the future for Venezuela. House Democrats warn of the possibilities after Trump leaves office.

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Trump Administration Won't Be Around Forever

A handful of House Democrats sent a letter to 21 major oil and upstream services firms warning them that while the current administration favors investments in Venezuela, efforts could be upended should the next administration invalidate those arrangements.

U.S. military forces seized Venezuelan President Nicolas Maduro and his wife from their compound in Caracas earlier this month, whisking them off to New York to face charges on narcotics trafficking.

Prior to that, military strikes on suspected Venezuelan drug traffickers brought allegations of war crimes against Defense Secretary Pete Hegseth. On Wednesday, U.S. Representative Sean Casten, a Democrat representing Illinois, was joined by 12 other House Democrats, including House Foreign Affairs Committee Ranking Member Gregory Meeks (D-New York), in reminding executives at 21 oil and upstream services firms of the legal and financial risks of dabbling in Venezuela.

Representatives pointed to a handful of roadblocks, from the war powers delegated to Congress in the U.S. Constitution, to concerns about the legal basis for claims made by President Donald Trump that his administration is in charge of Venezuela, not Venezuelan Acting President Delcy Rodriquez.

"We urge you, therefore, to bear in mind that it is possible that efforts to invalidate any such arrangements might be made by Congress, a subsequent administration, or a future Venezuelan government, and that participation might present your company with legal and enforcement risk."

Any "informal assurances," the House leaders added, offered by the Trump administration might not hold beyond 2029, when Trump is constitutionally-mandated to leave the presidency after his second, non-consecutive term.

Their letter comes as the Reuters news service, citing sources with knowledge of the situation, said U.S. supermajor Chevron is planning to boost Venezuelan crude oil exports from levels of around 100,000 barrels per day (BBL/d) in December to 300,000 BBL/d by next month.

Chevron until recently was the only company with a U.S. license to operate in sanction-strapped Venezuela. Since Maduro's capture early this month, Chevron now has competition from the likes of Trafigura and Vitol.

Trump has since spoke of billions of dollars in investor interest and the prospect for a flood of Venezuelan barrels into a U.S. refining sector that's tailored to run heavier foreign-sourced slates of crude oil rather than the light, sweet crude oil found in domestic shale basins. The president, meanwhile, is picking and choosing which companies can play a role. Trump had suggested that Exxon Mobil may not be involved after the company's chief executive said Venezuela was "un-investable." TotalEnergies also raised reservations.

House leaders reached out to Aspect Holdings, Baker Hughes, BP, Chevron, ConocoPhillips, Continental Resources, ExxonMobil, Eni, Halliburton, Hilcorp, HKN, Marathon, Phillips 66, Raisa Energy, Repsol, Shell, SLB, Tallgrass, Trafigura, Valero and Vitol.

Does The Math on Venezuela Work?

According to earlier reports from Reuters, U.S. Energy Secretary Chris Wright said sales were targeting a goal of $500 million, with the oil sold at a $15-per-barrel discount to Brent, the global benchmark for the price of oil. Brent crude oil on Thursday was trading near $69 per barrel, supported in large part from a geopolitical risk premium over renewed U.S. tensions with Iran.

Refineries in Venezuela, meanwhile, appear operational, with IIR Energy issuing few alerts since Maduro's capture.

Federal U.S. data seem to run counter to administration claims. The U.S. Energy Information Administration (EIA), the data arm of the Department of Energy, reported in its weekly petroleum status report for the seven-day period ending January 23 that the United States took in 94,000 barrels per day (BBL/d) of Venezuelan crude, compared to top-supplier Canada, with 3.9 million BBL/d during the same period.

Year-ago levels show U.S. importers took in 319,000 BBL/d of Venezuelan crude oil. Should the flood of barrels into the U.S. market materialize, it could endanger a domestic industry that's already bracing for headwinds due to forecasts of lower-for-longer crude oil prices. The EIA is already expecting Brent to average $55.87 per barrel this year, far below the 2025 average of $69.04 per barrel.

By the Numbers

• 21 oil companies warned about Venezuelan risk.
• 94,000 BBL/d in Venezuelan imports to U.S.

Key Takeaways

• What happens after Trump?, Democrats warn.
• Chevron said to be looking to 300,000 BBL/d in Venezuelan exports.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).