Authored by Sean Tseng via The Epoch Times,

President Donald Trump says he is open to China and India investing in Venezuela’s oil sector, but new U.S. rules show that any reopening of Venezuela’s oil trade will come with strict legal and financial conditions designed to keep Washington firmly in control.

Speaking to reporters aboard Air Force One on Jan. 31, Trump said China is “welcome to come in and we’ll make a great deal on oil.” He also said the United States is working with India on a plan to buy Venezuelan crude instead of oil from Iran, adding that the basic “concept” has already been agreed upon.

Those remarks came as the U.S. Treasury Department rolled out a new Venezuela-related oil license that lays out who can participate, how money moves, and where disputes are settled.

Together, Trump’s remarks and the new rules point to a cautious reopening of Venezuela’s oil trade—one that allows limited activity while channeling it through a system the United States can closely monitor and enforce.

A License That Opens Doors—But Narrows the Path

The Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License 46, which authorizes certain Venezuela-related oil activities. It allows established U.S. entities to lift, ship, buy, sell, store, and refine Venezuelan-origin oil.

But the authorization comes with tight conditions.

Contracts covered by the license must be governed by U.S. law, and any disputes must be handled in U.S. courts. Payments to sanctioned or blocked parties cannot be made directly; instead, they must be placed into U.S.-designated “Foreign Government Deposit Funds,” where access and use are restricted.

The license also draws clear red lines. It does not authorize transactions involving Russia, Iran, North Korea, or Cuba.

China-linked structures face additional limits. The license bars covered transactions involving U.S.- or Venezuela-based entities that are owned or controlled by, or operate in joint ventures with, individuals or companies based in or organized under the laws of the “People’s Republic of China.”

In effect, companies seeking to operate under U.S. authorization must accept U.S. legal jurisdiction, U.S. oversight, and U.S.-controlled payment channels—conditions that significantly narrow how Chinese-linked firms can participate when U.S. banks, approvals, or services are involved.

Alongside the license, the White House issued an executive order on Jan. 9 to establish and protect the Foreign Government Deposit Funds system. Under this structure, Venezuela-related oil revenues that move through U.S.-designated accounts are held under U.S. custody, with limits on how the funds can be transferred or used.

The stated aim is to keep transactions compliant with sanctions and prevent money from flowing directly to blocked actors. The system also shields funds from creditors and certain judicial claims while giving Washington greater leverage over how oil revenues are handled.

India’s Return to Venezuelan Oil

India has a history as a buyer of Venezuelan oil. Before sanctions and political risk narrowed Venezuela’s export options, India was a significant customer. In 2019, India imported around 300,000 barrels per day of Venezuelan crude on average, according to S&P Global. Those purchases fell sharply as U.S. sanctions tightened in 2020.

Trump on Jan. 2 said the United States and India have reached a trade agreement and will begin lowering tariffs on each other’s goods immediately. He also said India has agreed to stop buying Russian oil, a move he argued would help pressure Moscow and shorten the war in Ukraine.

Russia depends heavily on energy exports to fund the war, now nearing its fifth year, and India and China have been among the largest buyers of discounted Russian crude since Western sanctions were imposed.

Trump added that India is interested in buying “much more” oil from Venezuela. That interest comes as Venezuela recently amended its hydrocarbons law to loosen state control and attract more foreign investment into its oil sector.

For New Delhi, Venezuelan oil could provide an alternative supply that aligns more closely with U.S. policy, even if it means accepting U.S. oversight of contracts and payments.

China’s Deeper Stake—and Higher Risk

China’s position in Venezuela is deeper and more complicated. Over two decades, Beijing became one of Caracas’s main financial backers, extending an estimated $60 billion in loans since 2007 through so-called “loans-for-oil” deals, according to a Jan. 7 analysis by Columbia University.

Much of Venezuela’s oil exports to China have been used to repay that debt. By 2023, about 68 percent of Venezuela’s oil exports were going to China, according to U.S. Energy Information Administration (EIA) data.

If the United States succeeds in directing Venezuela’s oil flows under its own framework, China could face losses of $10 billion to $12 billion on outstanding loans, the Columbia analysis suggests.

Asked aboard Air Force One on Jan. 31 whether China would ever recoup the money it lent Venezuela, Trump said, “I don’t know.”

Venezuela’s Oil is Vast—But Hard to Ramp Up Quickly

Even if political and legal hurdles are cleared, Venezuela’s oil output cannot rise quickly.

The country holds an estimated 303 billion barrels of proven oil reserves, among the largest in the world, according to the EIA. Much of that oil is heavy or extra-heavy crude concentrated in eastern Venezuela, requiring blending or specialized processing. That adds cost and complicates refining and transport.

Years of mismanagement, sanctions, infrastructure decay, and the loss of skilled workers have further weakened the industry. Venezuela produced around 3.5 million barrels per day in the late 1990s. By late 2025, output was estimated at about 1.1 million barrels per day, according to the International Strategic Action Network for Security.

U.S. import data underline how limited current flows remain. EIA figures show U.S. crude imports from Venezuela at roughly 72,000 to 120,000 barrels per day during several weeks in January 2026—up from near-zero levels, but still small in global terms.

Wall Street sees room for growth, but not a rapid rebound.

JPMorgan Chase, in a Jan. 8 report, estimated that under a new administration, output could rise to 1.3 million to 1.4 million barrels per day within two years.

Goldman Sachs analysts, in a Jan. 5 interview, projected that if production reaches 2 million barrels per day, global oil prices could fall by about $4 a barrel—a boost for U.S. consumers, but a deflationary shock for other producers.

Trump’s remarks point to a broader willingness to bring more countries into Venezuela’s oil trade. But the new U.S. license makes clear that any authorized activity must run through U.S. legal jurisdiction and U.S.-controlled payment channels, with restrictions on sanctioned countries and certain China-linked entities.