Jesús Daniel Romero from Miami Strategic Intelligence Institute for Poder & Dinero and FinGurú
Introduction
As U.S. sanctions tighten their grip on Venezuela's oil sector—especially after Chevron's license expired—Beijing is positioning itself to capitalize on Washington's strategic retreat. With over $60 billion in outstanding loans granted to Maduro's regime over the past two decades, China has a clear objective: to recover its debt and deepen its influence over Venezuela's vast energy reserves.
However, contrary to the narrative pushed by some in the U.S. oil industry, including figures like Harry Sargeant—China may not be the immediate threat that has been portrayed. The real strategic error would be to lift the sanctions prematurely, allowing a criminal regime to regroup, rearm, and reaffirm its regional influence.
Signal or Surrender?
Vice President Delcy Rodríguez recently declared that Venezuela's oil production remains at “100 percent” despite the revocation of U.S. licenses. However, independent data tells a different story. According to secondary OPEC sources, Venezuela produced approximately 888,000 barrels per day in April 2025—well below the regime's official account (OPEC, 2025).
In fact, it was the Biden administration that first reopened the door to Venezuela's sanctioned oil sector by issuing General License 41 in November 2022, allowing Chevron to resume limited extraction and export operations in partnership with PDVSA. This concession, presented as a goodwill gesture to incentivize democratic reforms, de facto allowed a U.S. company to evade sanctions while the broader embargo remained in effect (Thompson Hine, 2025). The Maduro regime capitalized on this opening to bolster its position without making significant political concessions, leading to a partial reimposition of sanctions in 2024—an implicit acknowledgment that the strategy had failed.
The Venezuelan oil industry, while still operating at a moderate level, faces a logistical bottleneck: limited internal storage capacity. With international buyers restricted and U.S. and European refineries out of the picture, PDVSA is nearing its maximum capacity. Without constant export channels, the regime will soon confront an unsellable crude surplus, forcing it to sell at heavy discounts to second-tier buyers—often through intermediaries linked to China, Iran, or opaque trading firms. This will not only reduce its state revenues but also represent another challenge that further paralyzes the regime.
Despite official claims that production is stable, many analysts and observers believe that Venezuela produces much less than it reports. This internal shortfall also affects its ability to supply subsidized oil to key allies like Cuba. Mexico has intervened to cover that deficit, sending shipments to the island, raising questions about regional complicity in sustaining authoritarian regimes through energy diplomacy.
China's Calculated Patience
China's strategy is long-term. Through joint ventures with PDVSA and crude payment mechanisms, Beijing has discreetly expanded its presence. However, it does not do so for free: it leverages Venezuelan desperation to acquire strategic assets. While the U.S. debates its political coherence, China advances.
Although the Venezuelan regime may offer oil fields as a payment tool, national law imposes a limitation: all foreign participation in production must occur through joint ventures where PDVSA maintains majority ownership (Organic Hydrocarbons Law, 2001). This limits China's direct operational control and creates friction between its commercial interests and sovereign legal restrictions.
Phantom Fleets and Illicit Networks
The regime's survival increasingly depends on gray and black maritime fleets: tankers operating without transponders, with forged records and in alliance with sanctioned actors like Iran and Russia. These vessels have been key to laundering sanctioned crude, evading maritime monitoring, and financing state-sponsored criminal operations through covert sales. This is not conventional trade—it's state-sponsored evasion (FinCrime Central, 2025).
Strategic Recommendation
The Trump administration must combine paralyzing sanctions not only against Venezuela but against those countries and entities enabling its survival. This includes sanctioning ports, insurers, and shipowners collaborating with illicit operations; applying secondary sanctions to Turkish, Chinese, Russian, and Iranian facilitators; and deploying U.S. naval and satellite capabilities to intercept this activity.
The U.S. administration must also reevaluate the granting of licenses to companies like Chevron and operators like Harry Sargeant, who have served as intermediaries for the regime, facilitating income, legitimacy, and distorting threat perceptions. These ties have created false scenarios before U.S. government agencies, undermining national policy decisions and compromising hemispheric security.
Although the Trump administration has officially allowed Chevron to remain in Venezuela under limited authorization—that prohibits the production and export of oil—the justification that this protects U.S. interests “without providing financial support to Maduro's regime” sounds hollow. In practice, this represents a form of geopolitical duality: a selective application of sanctions that favors corporate preservation over coherent policy. It sends contradictory signals to allies, adversaries, and the Venezuelan people themselves. If the goal is to economically suffocate the regime, the United States should not at the same time maintain its own energy companies parked within the same system that helps sustain it—however inactive their operations may appear.
Conclusion
This is not just about Venezuela—it's about the security of the hemisphere. The loss of U.S. credibility in Latin America empowers autocrats and rivals. Sanctions must not be relaxed—they must be reinforced. The alternative is a criminal regime in Caracas acting as a proxy for powers seeking to challenge the U.S. in its own backyard.
References
FinCrime Central. (2025, May 22). Iranian oil smuggling & the shadow fleet. https://fincrimecentral.com/iranian-oil-smuggling-shadow-fleet-sanctions/
OPEC. (2025). Monthly Oil Market Report – April 2025. Organization of the Petroleum Exporting Countries. https://www.opec.org/opec_web/en/publications/338.htm
Thompson Hine LLP. (2025, March 28). Reversing the Biden Administration: OFAC Announces the Wind Down of Venezuela General License 41. https://www.thompsonhine.com/insights/alerts/2025-03-28-reversing-the-biden-administration-ofac-announces-the-wind-down-of-venezuela-general-license-41
Organic Hydrocarbons Law, Official Gazette No. 37.323, Bolivarian Republic of Venezuela (2001). https://www.pdvsa.com/images/pdf/leyhidrocarburos.pdf
Jesús Daniel Romero is a Retired U.S. Naval Intelligence Commander. Co-Founder and Senior Fellow of the Miami Strategic Intelligence Institute.
He is also a writer on topics of his expertise and columnist for Diario Las Américas in Miami, Florida.
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