Whalesbook
US Treasury Secretary Scott Bessent has hinted at a possible easing of sanctions on Venezuela's oil exports within the coming week. This potential policy shift follows the reported arrest of Venezuelan President Nicolas Maduro.
The U.S. Treasury is also scheduled to engage in discussions with the heads of the International Monetary Fund (IMF) and the World Bank. These talks will focus on the latter institutions' re-engagement with Venezuela, aiming to unlock approximately $5 billion in Venezuelan funds currently held in foreign banks.
"We're de-sanctioning the oil that's going to be sold," Bessent stated in a recent interview. He elaborated that efforts are underway to facilitate the return of oil sale proceeds to Venezuela, intended for government operations and public benefit. "How can we help that get back into Venezuela, to run the government, run the security services and get it to the Venezuelan people?" he questioned, outlining the Treasury's review.
President Donald Trump has already issued an executive order designed to protect Venezuelan oil revenue held in U.S. Treasury accounts from creditors, safeguarding these funds for Venezuela's future "peace, prosperity and stability."
Plans detailed by the Treasury include converting Venezuela's IMF Special Drawing Rights, valued at about $4.9 billion, into dollars to support reconstruction efforts. This strategy mirrors a similar approach the Treasury employed with Argentina last year, backing a $20 billion swap line to bolster its economy.
This development represents a notable shift in U.S.-Venezuela relations. The IMF has not formally engaged with Venezuela for over two decades, with its last assessment conducted in 2004. Venezuela's interaction with the World Bank ceased in 2007, following then-leader Hugo Chavez's declaration of independence from Washington's funding.
Bessent expressed optimism regarding the return of private sector actors to Venezuela's oil industry, anticipating that smaller companies will move quickly. He also suggested that Chevron, a company with an existing presence in the nation, is likely to enhance its commitment.
Furthermore, the Treasury Secretary indicated that the U.S. Export-Import Bank could play a role in supporting financing for Venezuela's oil sector, echoing sentiments previously voiced by U.S. Energy Secretary Chris Wright.