US decision to end Venezuela oil licenses a balancing act: Treasury Secretary

The decision on whether to allow US oil companies to operate in Venezuela is a balancing act, US Treasury Secretary Scott Bessent said May 7, as the deadline nears for companies to wrap up operations there.

"It is a very acute balancing act there between displacing China with US entities providing foreign currency to the Maduro regime," Bessent told the US House Committee on Financial Services.

Representative Andy Barr, Republican-Kentucky, asked about the issue, noting that Venezuelan Vice President Delcy Rodríquez has asked China to buy more Venezuelan oil.

The Treasury Department has given Chevron until May 27 to wind down its oil operations in Venezuela.

Chevron CEO Mike Wirth said in a May 4 interview on Fox News that a Chevron exit from Venezuela could lure in Chinese and Russian companies.

"We're the only American company that remains on the ground in Venezuela," he said. "And if we were to leave, as others have, the oil production continues and American companies are replaced by companies from other countries, and historically that's been Chinese companies, Russian companies and others that are not necessarily in America's interest."

Venezuela regularly exports crude to the US, China, India, Spain and Singapore, according to S&P Global Commodities at Sea data.

China is the No. 1 buyer of Venezuelan crude. Exports to China averaged 255,000 b/d in April, according to CAS data.

During the hearing, lawmakers also pressed Bessent about cooperation between China and Iran.

Representative Ann Wagner, Republican-Missouri, asked why the Treasury Department is late in issuing a report that could trigger sanctions on Chinese financial institutions that buy Iranian oil.

Bessent said he would follow up with lawmakers about the report, but he touted recent sanctions on Chinese independent refineries.

"Since I have become Treasury Secretary, the Treasury has repeatedly sanctioned so-called Chinese teapot refiners who are very large buyers of Iranian oil," Bessent said. "We have begun that program over the last few weeks, and we will continue as needed."