U.S. President Donald Trump has announced plans to impose a 25% tariff on any country purchasing oil or gas from Venezuela.
The proposed tariff, revealed in a post on Truth Social, is part of the administration’s strategy to exert economic pressure on the South American nation.
Trump accused Venezuela of hostility toward the United States and alleged, without providing evidence, that the country had sent criminals, including gang members such as those from Tren de Aragua, to the U.S.
“Venezuela has been very hostile to the United States and the Freedoms which we espouse. Therefore, any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country,” Trump stated.
Potential impact on Nigeria gas deal
This proposed tariff raises questions about its potential impact on existing international agreements, including a recent gas deal between Venezuela and Nigeria.
- In August 2024, Nigerian firm Veneoranto Petroleum Limited, a subsidiary of Atlas Oranto, signed a significant agreement with Venezuelan state-owned PDVSA to develop natural gas prospects in the Barracuda Area, located in the Gulf of Venezuela, and the Boca de Serpiente Area, in Delta Amacuro.
- The agreement includes the technical and economic feasibility of the development of the Barracuda Area, located in territorial waters and the surface of the Gulf of Venezuela.
- The agreement also includes technical economic feasibility for the development of the Boca de Serpiente area in the northeast of the state of Delta Amacuro.
Latin American multimedia platform, teleSUR, said the signing ceremony took place on August 8 and had in attendance President Nicolás Maduro of Venezuela, Pedro Tellechea, Venezuelan minister of people’s power of petroleum; and Arthur Eze, Nigerian representative of Veneoranto Petroleum Limited.
Venezuela’s Global Oil Trade and Ongoing U.S. Sanctions
Venezuela continues to play a pivotal role in the global oil market, producing 921,000 barrels of crude oil per day in 2024, according to Lipow Oil Associates.
- China emerged as the top destination for Venezuelan oil, receiving 351,000 barrels daily, followed by the United States, which imported 228,000 barrels per day despite sanctions. Venezuelan oil remains significant to the U.S. energy sector, facilitated in part through Chevron’s joint-venture license, which allows limited oil trade.
- The U.S. Treasury Department recently extended this license until May 27, 2025, exempting Venezuela from certain economic sanctions.
- These measures follow a fluctuating sanctions regime. The Biden administration briefly lifted sanctions on Venezuelan oil in 2023, only to reimpose them in April 2024, citing a lack of free and fair elections under Venezuelan President Nicolás Maduro’s government.
President Trump’s proposed tariffs drew strong criticism from Venezuela and its top trading partner, China. Venezuelan President Nicolás Maduro condemned the tariffs as “arbitrary, illegal, and desperate measures” aimed at undermining the country’s sovereignty and economic progress.
“For years, the fascist right, repudiated by the Venezuelan people, has promoted economic sanctions with the hope of bringing Venezuela to its knees. They failed because Venezuela is a sovereign country. After all, its people have resisted with dignity, and because the world no longer submits to any form of economic dictatorship,” Maduro’s government stated.
China also voiced its opposition to the U.S. move. Speaking at a regular briefing, Ministry of Foreign Affairs spokesperson Guo Jiakun criticized the U.S. for interfering in Venezuela’s internal affairs and called for the removal of unilateral sanctions. If implemented, Trump’s tariff could significantly impact U.S.-China trade, raising tariffs on Chinese goods to 45% and taxes on steel and aluminum to 70%.
What you should know
The proposed tariff has far-reaching implications for global energy markets and U.S. international relations.
- For Venezuela, which remains heavily reliant on oil exports, the additional economic pressure could disrupt its existing trade partnerships, particularly with nations like China and Nigeria.
- Veneoranto Petroleum Limited’s agreement with PDVSA emphasized Nigeria’s energy ambitions in South America, but the long-term viability of such projects may come under scrutiny if U.S. sanctions intensify.
- The global oil market also faces potential volatility. While Venezuelan oil exports to the U.S. remain relatively small compared to Canada’s 4.1 million barrels per day, they are still critical to meeting American energy demands. Analysts warn that escalating trade tensions could lead to higher global oil prices and reduced supply flexibility.
As the Trump administration moves forward with its plans, questions remain about the broader economic and geopolitical consequences of imposing such tariffs. Market watchers will closely observe whether Trump’s policies succeed in exerting pressure on Venezuela while balancing U.S. interests in global trade and energy security.
