(BOE Report) – Global oil prices fell on Wednesday and China denounced the U.S. as a bully after President Donald Trump’s administration said it had persuaded Venezuela to divert supplies from Beijing and import up to $2 billion worth of embargoed crude.
The deal was in line with Trump’s stated aim of controlling the South American OPEC member’s vast oil reserves after deposing its leader Nicolas Maduro whom it had long cast as a drug-trafficking dictator in league with Washington’s foes.
Maduro’s Socialist Party allies remain in power in Venezuela, where interim President Delcy Rodriguez is treading a fine line between denouncing his “kidnapping” and kick-starting cooperation with the U.S. under explicit threats from Trump.
He said the U.S. would refine and sell up to 50 million barrels of crude stuck in Venezuela under a U.S. blockade as a first step in his plan to revive a sector long in decline despite sitting on the largest reserves in the world.
“This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!” Trump posted on Tuesday.
Venezuela has not confirmed the deal.
Crude prices fell around 1.0% on world markets due to anticipated increased supplies.
The deal could initially require cargoes bound for Venezuela’s top buyer China to be rerouted as Caracas seeks to unload millions of barrels stranded in tankers and storage.
“The United States’ brazen use of force against Venezuela and its demand for ‘America First’ when Venezuela disposes of its own oil resources are typical acts of bullying,” Chinese foreign ministry spokesperson Mao Ning told a press conference.
“These actions seriously violate international law, gravely infringe upon Venezuela’s sovereignty, and severely damage the rights of the Venezuelan people.”
China, Russia and leftist allies of Venezuela have all denounced the U.S. raid to capture Maduro at the weekend, which was Washington’s biggest such intervention in Latin America since the 1989 invasion of Panama to topple Manuel Noriega.
Washington’s allies are also deeply uneasy at the extraordinary precedent of seizing a foreign head-of-state, with Trump making a slew of threats of more action – from Mexico to Greenland – to further U.S. interests.
DOZENS DIED DURING CAPTURE OF MADURO
Some details are still sketchy on just how U.S. Special Forces swooped into Caracas by helicopter under darkness on Saturday, smashing Maduro’s security cordon and seizing him at the door of a safe room, with no loss of U.S. lives.
Venezuela has not confirmed its total losses, though the army posted a list of 23 of its dead and ally Cuba said 32 members of its military and intelligence services died. The U.S. estimates about 75 fatalities, the Washington Post reported.
Maduro, 63, who had ruled Venezuela since the 2013 death of his predecessor and mentor Hugo Chavez, pleaded not guilty on Monday to narcotics charges in a Manhattan court where he was shackled at the ankles and wore orange and beige prison garb.
Trump appears to be calculating that it is better for stability in Venezuela to work with Maduro’s senior allies for now. He is stressing revival of the oil sector with the help of U.S. firms as the priority, not the freeing of political prisoners or a new vote for a democratic transition.
VENEZUELAN OPPOSITION KEPT WAITING
Venezuela’s main anti-Maduro figure Maria Corina Machado, who left in disguise to pick up the Nobel Peace Prize in October, wants to return home where she says the opposition would easily win a free vote.
But she is also taking care not to antagonise Trump, saying she would like to personally give him the Nobel prize which he had coveted and which she dedicated to him at the time. She says she is fully on board with his aspirations to make Venezuela a major ally of the U.S. and the energy hub of the Americas.
Banned from running in a 2024 election, Machado’s ally Edmundo Gonzalez won overwhelmingly, according to the opposition, the U.S. and various election observers.
While working with Rodriguez and other top Venezuelan officials, the U.S. has warned they must cooperate or risk sharing Maduro’s fate.
Hardline Interior Minister Diosdado Cabello, who controls security forces accused of widespread rights abuses, is under particular scrutiny, sources told Reuters.
The U.S. is also closely watching Defense Minister Vladimir Padrino, who like Cabello is under a U.S. drug trafficking indictment and has a multi-million-dollar bounty on his head.
Rodriguez herself is under U.S. sanctions, with her foreign financial assets identified as potential leverage, one source briefed on U.S. administration thinking said.
The U.S. is also pressuring the interim Venezuelan government to expel official advisers from China, Russia, Cuba and Iran, the New York Times reported.
(Reporting by Reuters bureaux worldwide; Writing by Andrew Cawthorne; Editing by Ros Russell)
