Trump Administration Sells First Cargo of Venezuelan Oil for $500 Million

The Trump administration has made its first sale of Venezuelan crude oil, a consignment valued at $500 million, White House officials told multiple media outlets on Wednesday. The sale is a landmark in the administration's plan to market Venezuela's energy resources on the global stage, starting with currently-stored volumes in tankers and tank terminals.

According to the New York Times, Vitol and Trafigura - two trading houses that made arrangements to help the administration with oil sales - were involved in the first transaction. The oil is expected to end up in the United States for refining, after storage. Trafigura has confirmed its role in transporting and marketing Venezuelan crude.

The crude is reported to have sold at a discount of about $6-9 below Brent. This is much more than it would have fetched at the rates it brings in China, where it typically sells at a far cheaper price reflecting its sanctioned status.

U.S. refiner Citgo, which was recently auctioned off to an American consortium in a forfeiture proceeding, could be well positioned to benefit. It was previously owned by Venezuelan state oil firm PDVSA, and it was the largest U.S. importer of Venezuelan crude in the pre-sanctions era; much of its infrastructure was built for extra-heavy grades, like PDVSA's Merey-16.

There will likely be more sales coming. The White House has outlined a clear plan to control the marketing of Venezuela's oil exports, in perpetuity. With its campaign of tanker seizures - now totaling five hulls - the administration has the leverage needed to move ahead with its plans. The Department of Justice has reportedly filed for dozens of additional warrants for civil forfeiture of specific tankers, preparing the groundwork for more seizures if needed.