Trump’s plan to take Venezuelan oil angers China, pushes prices down

HOUSTON/BEIJING – Global oil prices fell on Jan 7 and China denounced the US as a bully after US President Donald Trump’s administration said it had persuaded Venezuela to divert supplies from Beijing and import up to US$2 billion (S$2.56 billion) worth of sanctioned crude.

The deal was in line with Mr 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 capture and kick-starting cooperation with the US under explicit threats from Mr Trump. 

Trump: Oil money ‘will be controlled by me’

He said the US would

refine and sell up to 50 million barrels of crude

stuck in Venezuela under a US 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!” Mr Trump posted on Jan 6.

Sources at state oil company PDVSA told Reuters negotiations for an export deal had progressed, though Venezuela’s government made no official announcement.

Crude prices fell around 1 per cent 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 spokeswoman Mao Ning told a press conference.

She added: “These actions seriously violate international law, gravely infringe upon Venezuela’s sovereignty and severely damage the rights of the Venezuelan people.”

Beijing, which imported 389,000 barrels per day of Venezuelan oil in 2025, representing about 4 per cent of its seaborne crude imports, may now turn more to Iran and Russia, traders said.

China, Russia and leftist allies of Venezuela have all denounced the US raid to capture Maduro, 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 Mr Trump making a slew of

threats of more action

– from Mexico to Greenland – to further US interests. 

Dozens died during capture of Maduro

Some details are still sketchy on just how US Special Forces swooped into Caracas by helicopter under darkness on Jan 3, smashing Maduro’s security cordon and seizing him at the door of a safe room, with no loss of US 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.

Maduro, 63, who had ruled Venezuela since the 2013 death of his predecessor and mentor, Mr Hugo Chavez,

pleaded not guilty on

Jan 5

to narcotics charges

in a Manhattan court where he was shackled at the ankles and wore orange and beige prison garb. 

Mr 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 US 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, Ms Maria Corina Machado, who left in disguise to pick up the Nobel Peace Prize in October 2025, wants to return home, where she says

the opposition would easily win a free vote

. 

But she is also taking care not to antagonise Mr 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 backs Mr Trump’s desire to make Venezuela a major ally and the energy hub of the Americas.

Banned from running in a 2024 election, Machado ally Edmundo Gonzalez won overwhelmingly, according to the opposition, the US and various election observers. 

While working with Ms Rodriguez and other top Venezuelan officials, the US has warned that 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 US is also closely watching Defence Minister Vladimir Padrino, who, like Mr Cabello, is under a US drug trafficking indictment and has a multi-million-dollar bounty on his head.

Ms Rodriguez herself is under US sanctions, with her foreign financial assets identified as potential leverage, one source briefed on US administration thinking said. 

The US is also pressuring Venezuela to expel official advisers from China, Russia, Cuba and Iran, the New York Times reported.

Russia has deployed a submarine and other vessels to escort an empty, ageing oil tanker trying to evade the US blockade near Venezuela, the Wall Street Journal reported. REUTERS