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Published : 25 Nov 2025, 08:37 PM
Venezuelan President Nicolas Maduro has the flexibility and the incentive to offer crude oil cargoes, which the country mostly sells to China, as a bargaining chip if Venezuela were to hold negotiations with the United States.
US President Donald Trump's administration, which has boosted its military presence in the Caribbean, has said he is open to talks with Maduro, whose government has struggled to lure foreign investment in the country's oilfields amid US sanctions.
The US on Monday formally designated Venezuela's Cartel de los Soles a foreign terrorist organization, increasing pressure on Maduro amid preparations to launch further operations in the coming days, according to sources.
CRUDE OIL LEVERAGE
OPEC member Venezuela's oil production has stabilised around 1.1 million barrels per day this year, less than a third of its all-time high in the late 1990s. More than 80% of exports were shipped to China between June and October, according to shipping data.
Those cargoes, alongside possible operating licenses for US companies, could be Maduro's best leverage in any talks, analysts say.
"Sending more oil to the US and protecting US investment in Venezuela is something Maduro can easily offer," said energy analyst Thomas O'Donnell. However, the offer "might not be enough now that Washington has the upper hand," he said, referring to the oil market's current stability and low prices.
Venezuela's Oil Minister Delcy Rodriguez said on Monday the US has targeted Venezuela because of its vast crude reserves.
"They want Venezuela’s oil and gas reserves. For nothing, without paying," she said, having previously noted US Gulf refiners' demand for Venezuela's heavy crude grades. The US mainly produces light oil.
Venezuelan oil exports to the US through a license to PDVSA's partner Chevron CVX.Nfell in the third quarter to half the volume of the first quarter.
VENEZUELA COULD DIVERT CARGOES
Most of Venezuelan state oil company PDVSA's supply contracts were suspended when the US hit the country with sanctions in 2019, forcing PDVSA to sell almost all its oil on the spot market at large discounts.
Because PDVSA is no longer committed to long-term supply agreements, it could divert crude cargoes bound for Chinese independent refiners to the US and Europe under a fresh political agreement.
Venezuela's Oil Ministry, PDVSA, the White House, and the US State Department did not immediately reply to requests for comment.
Washington has for years blocked cash payments to PDVSA, but the oil company has vast experience with oil swaps that allow it to exchange its crude for much-needed fuel imports.
Venezuela's oil shipments to China have increased in the second half of 2025 to more than 80% of total exports, mainly due to US policies preventing exports to other destinations, compared with 63 percent all of last year, according to LSEG tanker movement data and internal PDVSA documents seen by Reuters. That leaves room for diversifying the destination of exports.
MORE FLEXIBLE LICENSES
Maduro's administration could also focus on negotiating the reincorporation of US licenses to foreign oil producers in the country, as some Venezuelan officials have asked, which would allow oil exports to the US and Europe to flow more freely.
Despite having the world's largest crude reserves, Maduro's administration has failed to allocate Venezuela's oilfields to experienced energy firms in recent years under a contract model he proposed, attracting only small investors that are not significantly contributing to the nation's output.
Most Western energy firms are not willing to invest following expropriations of foreign oil assets under former Venezuelan leader Hugo Chavez and the US sanctions that followed, or to inject the massive capital required to revive Venezuela's aging energy industry.
Such a revival effort would also be a huge challenge for the government's opposition, which is offering to reform Venezuela's oil industry if it takes office, as massive changes would be needed just to return to production levels of two decades ago.
Trump's administration has been inconsistent on authorisations, granting temporary licenses to some companies while freezing others.
