U.S. Treasury Secretary Scott Bessent announced that additional sanctions on Venezuela could be lifted as early as next week to facilitate oil sales. This decision comes as the U.S. government seeks to stabilize the Venezuelan economy and revitalize its oil sector. Bessent confirmed that he would also meet with leaders from the International Monetary Fund (IMF) and World Bank to discuss their potential re-engagement with Venezuela.
During an interview on Friday, Bessent highlighted that approximately $5 billion in Venezuela’s frozen IMF Special Drawing Rights (SDRs) could be used to support the country’s economic recovery. “We’re de-sanctioning the oil that’s going to be sold,” he stated while visiting an engineering facility in Winnebago. His remarks indicate the U.S. Treasury’s intention to facilitate the repatriation of proceeds from oil sales, which are largely stored on ships, back to Venezuela.
The lifting of sanctions is part of a broader strategy by the Trump administration to encourage U.S. oil producers to return to Venezuela. This announcement follows the recent arrest of Venezuelan leader Nicolas Maduro in New York, where he faces drug trafficking charges. U.S. sanctions have previously restricted international banks and other creditors from engaging with the Venezuelan government without a specific license, which has complicated a significant $150 billion debt restructuring viewed as crucial for attracting private capital.
On the same day, President Donald Trump signed an executive order preventing courts or creditors from seizing Venezuelan oil revenues held in U.S. Treasury accounts. This move aims to ensure that these funds are preserved to aid Venezuela in establishing “peace, prosperity, and stability.”
IMF and World Bank Possible Re-engagement
Bessent, who holds significant U.S. influence within the IMF and World Bank, noted that these institutions had already reached out to him regarding Venezuela. He expressed a willingness to convert Venezuela’s SDRs into dollars to assist in the country’s rebuilding efforts. Currently, Venezuela possesses about 3.59 billion SDRs, translating to approximately $4.9 billion at recent exchange rates, but access to these funds has been limited.
An IMF spokesperson confirmed that the organization is monitoring developments in Venezuela but refrained from commenting on Bessent’s proposed meeting. The IMF has not engaged with Venezuela for over two decades, with its last formal assessment of the Venezuelan economy conducted in 2004. Meanwhile, the World Bank ceased its loan dealings with Venezuela in 2007, when Maduro’s predecessor, the late Hugo Chavez, declared that Venezuela would no longer seek funding from Washington.
A source familiar with internal discussions at the World Bank indicated that the institution is exploring avenues to assist Venezuela, drawing parallels with its rapid responses to crises in Afghanistan and Syria.
Oil Sector Opportunities Ahead
Bessent believes that smaller, privately held companies will likely move quickly into Venezuela’s oil sector, despite some hesitation from major players such as Exxon Mobil, which has experienced nationalization of its assets in the past. “I think it’s going to be the typical progression where the private companies can move quickly,” he remarked, adding that Chemron, which has maintained a presence in Venezuela, is expected to increase its commitment.
Bessent also suggested that the U.S. Export-Import Bank could play a role in facilitating financing for Venezuela’s oil sector, reiterating earlier comments made by U.S. Energy Secretary Chris Wright. As the situation evolves, the potential for lifting sanctions marks a significant shift in U.S. policy towards Venezuela, underscoring the intricate relationship between economic recovery and international cooperation.