In his testimony before the Senate Foreign Relations Committee on January 28, Secretary of State Marco Rubio reassured Senator Jeanne Shaheen that part of the proceeds from the first sale of 50 million barrels of oil—given by the Venezuelan government led by Delcy Rodríguez to the United States—were returned to Venezuela and would be used to keep the state functioning.
While serious doubts remain about the legitimacy of the Rodríguez government—which was left in place to avoid civil conflict but is not the President democratically elected in 2024—this development is nonetheless welcome. It suggests an effort to prevent an immediate collapse of basic state operations during a fragile political transition.
Rubio’s clarification matters in light of President Trump’s initial remarks following the detention of Nicolás Maduro. “We’re going to be taking out a tremendous amount of wealth out of the ground,” Trump said, adding that the proceeds would benefit both the Venezuelan people and the United States “in the form of reimbursement for the damages caused us by that country.”
Those “damages,” if understood as debts owed to U.S. oil companies, are substantial. Over the years, Venezuela has also defaulted on obligations to bondholders, multilateral institutions, and foreign governments, including China, Iran, and Russia. It owes billions to companies that won international arbitration awards following the nationalization of their assets. Taken together, defaulted bonds, unpaid loans, and arbitration claims amount to approximately $170 billion.
Using the entirety of oil revenues from Venezuela’s severely degraded energy sector to service debt alone could provoke a humanitarian crisis similar to the one experienced in 2018, when sanctions contributed to economic collapse and drove a diaspora of 1.3 million Venezuelans in a single year.
However, granting the government of Delcy Rodriguez a blank check and total control over these funds might jeopardize regime change and preserve the corrupt practices that left the country impoverished.
In 2019, the U.S. State Department documented extensive corruption centered on the looting of Petróleos de Venezuela (PDVSA), Venezuela’s state oil company, through money laundering, fraudulent currency exchanges, and inflated government contracts. More recently, oil sales were conducted via cryptocurrencies to evade sanctions. According to Transparencia Venezuela, a global NGO dedicated to fighting corruption, these transactions were executed off the books and outside transparent financial channels.
Three days after Maduro’s removal, the Trump administration issued an executive order blocking court actions, seizures, and private claims against Venezuelan oil revenues held in U.S. Treasury accounts, therefore shielding these assets from creditors.
There is precedent for this approach. In 2003, President George W. Bush issued an executive order protecting Iraqi oil revenues and development funds from creditor lawsuits. What is unprecedented, however, is the United States assuming a decisive role in determining how another country’s sovereign revenues may be used through a negotiated arrangement between Washington and Caracas.
Secretary Rubio has told Congress that, during this transition and stabilization phase, oil sale proceeds will be deposited in U.S.-based Treasury accounts. Washington will define allowable expenditures, while Caracas will submit budget requests. A portion of the funds will be allocated to an audit process. The proceeds of the first US-controlled sale of Venezuelan oil have already been transferred back to Venezuela and will be audited once oversight mechanisms are operational.
Approving this budget will be one of the most complex challenges the Trump administration faces as it pursues regime change while avoiding state collapse. Deciding, for example, whether to approve large military and security expenditures that have historically sustained authoritarian rule or to ensure transparency and independence in the audit process are crucial decisions Washington will have to make. Not to mention, for how long this extraordinary financial trusteeship could last without undermining Venezuelan sovereignty or the legitimacy of a future democratic government.
So far, the implementation of the plan has not inspired confidence. On January 29, the Washington Post revealed that the first Venezuelan oil sales were conducted through traders with documented histories of corruption. Relying on such intermediaries risks reproducing the very practices that hollowed out Venezuela’s oil sector—and casts early doubt on Washington’s promise of accountability and reform.
Special Advisor
Angela Pachon is a special advisor to the Kleinman Center, in charge of designing and overseeing international programs and teaching. She was previously the Center’s research director.