Venezuela live updates: Trump says ‘only’ American products to be bought with oil deal revenue

The White House has said that all proceeds from the sale of Venezuelan oil will “settle” in US bank accounts to “guarantee the legitimacy” before being disbursed back the South American nation.

“The United States government has already begun marketing Venezuelan crude oil in the global marketplace for the benefit of the United States,” White House press secretary Karoline Leavitt told reporters Wednesday.

“All proceeds from the sale of Venezuelan crude oil and products will first settle in U.S. accounts at globally recognized banks to guarantee the legitimacy and integrity of the ultimate distribution of proceeds, and those funds will be disbursed for the benefit of the American people and the Venezuelan people, at the discretion of the United States government.”

Venezuela could face violent instability following the shock capture of President Nicolas Maduro by the US military, experts have warned.

While Maduro’s vice president Delcy Rodriguez was quickly sworn in with US-backing, there are fears a political vacuum sets the stage for a power struggle among multiple heavily armed factions that could spark an insurgency.

After deposing Venezuela’s president and taking over the country’s enormous oil reserves, President Donald Trump is floating the idea of using taxpayer funding to incentivize U.S.-based oil companies to expand operations there.

Since the military operation that led to the arrest of Nicolás Maduro and his wife, Trump said he would like the U.S.’s “very large” oil companies to “spend billions of dollars” to fix Venezuela’s broken oil infrastructure.

Read more from Ariana Baio:

U.S. Energy Secretary Chris Wright said Wednesday that revenue from Venezuelan oil sales will be used to stabilize the country’s economy first, before repaying fossil fuel giants such as Exxon Mobil and ConocoPhillips for their losses there.

Exxon Mobil and ConocoPhillips were major producers in the country before their projects were nationalized by former President Hugo Chavez nearly two decades ago.

Oil prices fell again on Wednesday as investors digested Trump’s deal to import up to $2 billion worth of Venezuelan crude.

The move would lift supplies to the world’s largest oil consumer.

Brent crude futures were down 77 cents, or 1.3 percent, to trade at $59.94 a barrel by 1:58 p.m. EST (6.58 p.m. GMT), while U.S. West Texas Intermediate crude fell $1.14, or 2 percent, to $55.99 a barrel.

Both benchmarks slipped more than $1 a barrel during the previous trading session, with market participants expecting ample global supply this year.

The deal between Washington and Caracas initially could require the rerouting of cargoes that were bound for China, sources told Reuters.

American oil producer Chevron is in discussions with the US government to expand its operating licence in Venezuela, aiming to increase crude exports to its own refineries and potentially sell to other buyers.

These talks unfold as Washington and Caracas advance negotiations to supply up to 50 million barrels of Venezuelan oil to the United States.

Early Wednesday, U.S. forces seized a sanctioned Venezuelan oil tanker being escorted by Russian naval ships in the North Atlantic, days after the dramatic capture of President Nicolas Maduro from his home.

The military and Coast Guard intercepted the Marinera tanker in waters north west of Scotland, after a two-week chase.

The vessel had evaded a U.S. blockade of sanctioned oil tankers near Venezuela, a measure the administration had implemented shortly before an elite unit seized Maduro in the early hours of Saturday.

Here’s a recap, in case you missed it:

Donald Trump has announced the Venezuela will only be purchasing “American made” products with the money made from its deal with the U.S. over oil production.

“I have just been informed that Venezuela is going to be purchasing ONLY American Made Products, with the money they receive from our new Oil Deal,” the president wrote on Truth Social Wednesday evening.

“These purchases will include, among other things, American Agricultural Products, and American Made Medicines, Medical Devices, and Equipment to improve Venezuela’s Electric Grid and Energy Facilities.

“In other words, Venezuela is committing to doing business with the United States of America as their principal partner – A wise choice, and a very good thing for the people of Venezuela, and the United States. Thank you for your attention to this matter!”