What is the petrodollar, as revealed by Venezuela’s rapidly recovering oil production?

The core of this story is General License 50A issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). This license authorizes specific entities—including BP, Chevron, Eni, Maurel & Prom, Repsol, and Shell—to operate in Venezuela’s oil and natural gas sector. This is not a full-scale restart of Venezuelan oil production; rather, it is a controlled channel through which well-known companies operate under U.S. legal supervision. The license reveals how the modern petrodollar system actually functions. It is not merely a pricing convention—it is an architecture of authority. The United States does not need to own oilfields to influence the price of every barrel; it can shape contracts, banks, insurers, payment pathways, vessels, counterparties, jurisdictions, and the conditions under which funds may be used. This is the real petrodollar—not a mythical treaty locked in some vault, nor any single transaction with Saudi Arabia, nor a conspiracy theory about monetary systems. The petrodollar is an energy-trade operating system centered on the U.S. dollar, encompassing correspondent banking, marine insurance, sanctions compliance, letters of credit, dispute resolution, vessel inspections, cargo documentation, and final payment confirmation. Venezuela makes this system especially visible because the same resource becomes a different economic object depending on its legally sanctioned circulation path: under illicit shadows, it becomes a scarce commodity; within lawful channels, it transforms into feedstock, collateral, repayment source, revenue, and strategic optionality. Corporate responses confirm this point. Eni has signed agreements with Venezuela’s Ministry of Petroleum and state-owned PDVSA to restart heavy crude projects in the Orinoco Belt; BP has signed a memorandum of understanding to develop natural gas resources offshore Trinidad and Tobago. Moreover, Eni resumed importing crude oil from Venezuela in April 2026—as physical payment for locally produced natural gas—thereby recovering long-overdue payments previously withheld by Caracas. This is not just an oil story; it is a balance-sheet story. For foreign energy companies, Venezuela’s reopening is not only about future production—it concerns whether they can recover past debts, convert receivables into tradable crude, make contracts credible, and transform stranded claims into bankable value through legally authorized mechanisms. That is the difference between short-term rebound and long-term reconstruction: authorization can trigger a rebound, but sustained reconstruction requires capital. Venezuela still faces severe constraints. According to Reuters, although power reliability is critical to any oil-and-gas recovery effort, foreign power suppliers remain hesitant to support grid rehabilitation without payment guarantees. This matters profoundly—electricity is not secondary infrastructure; it powers oilfields, terminals, substations, refineries, pumping stations, control systems, ports, and the fundamental logistics of modern energy systems. A country whose grid cannot keep machines running cannot revive its oil industry. Venezuela cannot rebuild its petroleum sector by license alone.

Trump stated he is seriously considering 'admitting Venezuela as the 51st U.S. state'—aiming at its $40 trillion in oil wealth. Is this feasible?

Since Delcy Rodríguez assumed the role of interim president, U.S.–Venezuelan relations have gradually normalized, with frequent and high-level engagement. • On February 3, Interim President Delcy Rodríguez met with newly appointed U.S. Chargé d’Affaires Laura Dogu at the Miraflores Palace. Dogu’s mission was to reopen the U.S. diplomatic mission in Venezuela—a facility closed since bilateral relations collapsed in 2019. Since assuming office, Rodríguez has consistently criticized the U.S. for allegedly kidnapping Nicolás Maduro and his wife, and has firmly asserted that neither the United States nor any other nation has the right to govern Venezuela. At the same time, she emphasized that Venezuela stands ready to cooperate with the U.S., provided mutual respect is upheld. • On February 11, Interim President Rodríguez hosted U.S. Energy Secretary Chris Wright at the Presidential Palace in Caracas. PDVSA President Héctor Obregón Pérez and Venezuela’s diplomatic representative to the U.S., Félix Plasencia, also attended. Following the meeting, Rodríguez stated that both sides held in-depth discussions on cooperation in strategic sectors—including oil, natural gas, mining, and electricity—and agreed to jointly formulate an energy cooperation plan aimed at laying the groundwork for a long-term bilateral partnership. She added that Wright’s accompanying technical delegation had already held meetings with their Venezuelan counterparts to advance implementation of related projects. • On March 4, Interim President Rodríguez met with U.S. Interior Secretary Doug Burgum at the Presidential Palace to discuss enhanced cooperation in oil, gas, and mineral resources. After the talks, both sides expressed strong optimism regarding prospects for collaboration in the minerals sector and explicitly affirmed their shared commitment to attracting foreign investment and deepening sectoral cooperation. • On March 5, the U.S. State Department announced its decision to resume diplomatic and consular relations with Venezuela. In its statement, the Department indicated that this step would help both countries jointly promote stability, economic recovery, and political reconciliation in Venezuela—and emphasized that phased arrangements would be employed to facilitate Venezuela’s smooth transition to an elected government. • On March 7, Trump declared at the ‘Shield of the Americas’ summit that the United States had formally recognized Venezuela’s current government. • On March 27, a Venezuelan delegation led by Acting Ambassador Félix Plasencia and Deputy Minister for Europe and North America Oliver Blanco held preliminary talks with U.S. Under Secretary of State Christopher Landau and other State Department officials. The Venezuelan side stated that the primary objective of these talks was to restore Venezuela’s diplomatic presence and consular operations in Washington, D.C. • On May 1, Jarrod Argent—the Director of the U.S. National Energy Dominance Council—arrived in Caracas aboard the first commercial direct flight between the two countries since resumption of air service, becoming the fifth senior U.S. official to visit Venezuela in 2026. Argent led a high-level delegation focused on advancing the signing of relevant memoranda of understanding to restart oilfields and mining areas previously shuttered under Venezuelan government control. His agenda included meetings with representatives of Repsol, Eni, Halliburton, and PDVSA. Meanwhile, international energy firms have recently intensified operations in Venezuela. A Shell team has deployed to the headquarters of Weppica in Monagas State to accelerate integrated development of the Carito and Pirital oilfields; Eni and PDVSA have reached agreement to restart the Junín-V field in the Orinoco Heavy Oil Belt to boost heavy crude output; the Venezuelan government has signed agreements with two U.S.-based energy companies—Hunt Overseas Oil Company and Crossover Energy—authorizing them to conduct oil-and-gas activities in the Orinoco Belt; and BP has signed a memorandum of understanding with Venezuelan Oil and Gas Minister Paula Eñao to develop the Deltana and Loran-Manatee natural gas blocks—and has already established a permanent office in Venezuela.

Eni Advances Venezuelan Heavy Oil Project, Eyes Year-End Approval

Oct 23, 2026

Eni plans a final investment decision by year-end on Venezuela's Junin 5 heavy oil field, targeting eventual production of 1 million barrels per day through phases extending to 2033.

reuters

2026-05-29

Trump Administration Tells Prosecutors to Stand Down on Venezuela Leader Investigation

2026-06-02

Venezuela's Rodriguez to Discuss Energy Ties During India Visit

2026-06-02

Venezuela’s Rodríguez to Visit India as War Reshapes Oil Trade

2026-06-04

India Seeks Deeper Venezuela Oil Ties After Rodríguez and Modi Meet

2026-06-04

Indian companies willing to deepen presence in Venezuela, India's oil minister says