Oil for Migrants: Did the Trump Administration Just Reset US Diplomatic Relations With Venezuela?

Big things are happening in US-Venezuela relations. But can they last?

At the beginning of this week, when most people’s attention was, quite understandably, fixated on Trump’s tariff tantrums, Trump announced that Venezuela’s Maduro government had agreed to receive Venezuelans deported from the United States. The news came days after the Trump administration revoked the extension of the Temporary Protected Status granted by Biden to Venezuelan migrants in his days as president, with the upshot that many of the 600,000 Venezuelan currently in the United States could soon face deportation.

Lest we forget, the main trigger for the mass migration of Venezuelans over the past six years, not only to the US but also to Spain, Colombia, Argentina, and many other Latin American countries, was Trump’s sharp escalation of sanctions in 2019. This massive wave of migration was, in the opinion of John Bolton, Trump’s then-National Security Advisor, a price worth paying. Bolton is also on the record admitting that one of Washington’s driving goals behind the 2019 attempted Juan Guaido coup was to get its hands on Venezuelan oil.

Ahead of Venezuela's election, John Bolton admitted to the Washington Post that he knew that the Trump admin's crippling sanctions and coup attempt against Venezuela would destroy its economy and force millions to flee:

“There was no doubt the sanctions, along with the general… pic.twitter.com/woW7cVYlf3

— Aaron Maté (@aaronjmate) July 29, 2024

The deal to return the migrants currently in the US, who apparently include members of Venezuela’s Tren de Aragua criminal organisation, was secretly negotiated by the White House in the days before Maduro agreed to receive Trump’s special mission envoy Richard Grenell in Caracas last Friday. The mere fact of the meeting was significant given that: a) the US has been trying to depose Venezuela’s Chavista government for at least 23 years; and b) Maduro himself still has a price on his head, originally set at $20 million by the US State Department under Trump 1.0 and recently increased to $25 million by the Biden administration.

As a gesture of good will, the Venezuelan government released half a dozen US citizens held in Venezuelan prisons who are accused of being mercenaries and plotting terrorist attacks on Mexican soil.

“Grenell returned to the United States on Friday with six of his fellow citizens who were being held in Venezuelan jails, accused of ‘terrorism’ and being mercenaries. The Venezuelan hostages arrived home last night in great shape!” Trump posted on TruthSocial, adding that Venezuela has agreed to receive all Venezuelans camped in the United States under an irregular immigration status .

A Rare Win-Win

Whether successful or not, this is clearly an attempt by the US to reestablish relations with Venezuela after over a decade of escalating sanctions and multiple failed regime change operations against the country. After Maduro and Grenell closed the deal, the prisoners were taken to the airport, blindfolded, hooded and handcuffed. No financial or other concessions were promised to Maduro, other than the prospect of improving relations with the US, Grenell said.

The only reward for Maduro was my presence: the first senior US official to visit the country in years , Grenell said. It was a great gift for him to receive a visit from an envoy of President Trump.

While these words may ring of imperial hubris and arrogance, the truth is that Maduro seemed the picture of contentment in the meeting. And who can blame him? Just a month ago, all the talk was of yet another regime change operation led this time by Venezuela’s CIA-sponsored “Iron Lady”, Marìa Corrina Machado. Biden had just given the opposition’s official candidate, Edmundo González, the red carpet treatment at the White House, pronouncing him as “president elect” of Venezuela just days before Maduro’s inauguration for a third term.

But all of that fizzled to nothing as the opposition failed to gather even a sizeable crowd of protesters on the day. While the Trump White House has also labelled González as Venezuela’s “rightful president”, its actions speak louder than its words. There can be no escaping the fact that one of Trump’s most important diplomatic aides just met up with Maduro and other members of his government to discuss ways forward. Maduro said he had a good, frank, direct, open and positive conversation with Grenell and noted that whoever knocks on the door, we will always open it, whoever wants to talk, we will talk .

Venezuelan Attorney General Tarek William Saab called the dialogue between the two nations a triumph for Bolivarian diplomacy and said that it leaves Venezuela’s far opposition right in a bad position:

“If President Donald Trump’s special envoy comes to discuss diplomatic issues and requests an audience with the president – ​​who ended up receiving him in the office of the Miraflores Palace – what does that imply in formal, diplomatic, public and communication terms?”

Most importantly, the fact that Trump officials are willing to meet and work with the Maduro government to carve out possible win-win solutions to some of their shared problems implies at least some degree of diplomatic recognition of Maduro as Venezuela’s head of state. As the foreign relations expert, Francisco Rodríguez notes, this marks an important change in US policy towards Venezuela:

“Since 2019, Washington recognised Juan Guaidó and then the 2015 National Assembly as legitimate representatives of Venezuela. Recognition is a matter of practical engagement. The United States maintains relations with governments that it does not consider legitimate—such as Iran, North Korea, and Russia under Putin. Diplomatic recognition is distinct from political approval.”

Some neocons in Washington are horrified at such a prospect. They include Elliot Abrams, a long-time cheerleader for US meddling in its “back yard” and defender of Latin American death squads who served as former special envoy to Venezuela and Iran during the first Trump administration. Abrams called the meeting in Caracas a terrifying moment ,saying any interaction could be seen as an implicit recognition of Maduro by the Trump administration.

It is also somewhat misleading to suggest that the Maduro government got nothing in return for agreeing to meet Grenell. One day after Grenell’s visit to Caracas , the license from the Office of Foreign Assets Control of the Department of the Treasury that allows the oil company Chevron to operate in Venezuela was automatically renewed for six months. The renewal was preceded by an attempt by Chevron to lobby so that the White House would not pay attention to Marco Rubio’s statements to cancel it.

Latin America’s Fastest Growing Economy

Venezuela is the third largest supplier of crude oil to the United States after Canada and Mexico, providing roughly 300,000 barrels per day, according to the United States Energy Information Administration. Most of these barrels are produced by the oil company Chevron, and they provide key business to many of Texas’ oil refining companies. They represent almost a third of Venezuela’s total oil production, estimated at almost one million barrels per day .

The extension of Chevron’s license suggests that other operating permits given to other foreign oil companies, such as Repsol or Total, will also be renewed. As the Argentina geopolitical analyst Bruno Sgarzini notes, the renewal is vital for Venezuela because the liquidation of Chevron’s foreign currency in the exchange market allows it to keep its currency more or less stable, and therefore keep inflation more or less in check. Meanwhile, the diluents sold by Chevron and other oil companies are vital for transporting and refining the extra-heavy crude oil from the Orinoco Belt to help support overall oil production.

The biggest loser in all this process is Venezuela’s political opposition. Trump completely ignored Edmundo González’s pleas not to strike an agreement with Maduro over the deportation of Venezuelans. Venezuela’s real opposition leader, Maria Corrina Machado, admitted that Grenell’s meeting with Maduro was “a terrible look, but it is what it is.”

As we reported on January 6, a few days before Maduro’s inauguration, Trump had suggested his new government would stop buying Venezuelan oil altogether. Now, it appears to be doing the exact opposite. But as we also noted in that article, Trump already bet the house on economic sanctions, Juan Guaidó and regime change last time round, and it was a humiliating disaster, culminating, in 2023, in Guaidó’s expulsion from Colombia and his return to Florida on a US government-paid flight.

This painful experience appears to have informed Trump’s decision making this time. According to a former official of his previous Administration, the president considers the opposition to be losers. “He gave them a lot and they failed. There is no way he will go down that road again.”

A potentially even bigger blow for Venezuela’s opposition forces will be the suspension of USAID funding, which has for over a decade filled the coffers of its political parties and affiliated NGOs and media outlets. According to the US Embassy in Venezuela, the US government has provided $2.3 billion of funds to support Venezuelans since 2017.

Here is Mark Green (centre), USAID administrator, handing $52 million to Julio Borges (on right), the former president of the Venezuela’s national assembly, and Carlos Vecchio (on left), who was ambassador to the US of Juan Guaidó’s interim government, in September 2019. If you watch to the end, you will actually see Borges literally rubbing his hands together in apparent anticipation of the money.

La #USAID informó que ha entregado 654 millones de dólares a la oposición del gobierno de #Venezuela para derrocarlo

Una fracción de ese monto fue transferido a Julio Borges, Carlos Vecchio y Lilian Tintori en septiembre/2019, tal como anunció Mark Green, director de la agencia pic.twitter.com/mb0iMWTFQG

— Organización Sures (@SuresDDHH) January 18, 2020

However, the Trump administration has ordered a three-month pause on almost all USAID aid abroad, to review whether the assistance complies with the policies of his government. An eventual audit could also reveal some of the sordid dealings that occurred during Juan Guaidó’s interim government that will, at the very least, cause embarrassment and reputational damage for many of the senior opposition leaders.

Since late 2023, there have been regular rumours that the FBI is investigating the destination of millions of dollars that the White House approved for humanitarian aid for the so-called “interim government” headed by Guaidó. According to some accounts, the FBI is trying to determine the whereabouts of approximately US$1 billion of USAID funds managed by Guaidó’s “interim government”, allegedly only 2% of which was properly used.

A Return to Pragmatism?

There is clearly a pragmatic element to Trump’s shift of policy toward Venezuela. The US needs Venezuela to willingly take back hundreds of thousands of its migrants, many of whom left Venezuela following Trump 1.0’s escalation of crippling sanctions against the country. To do that, it needs to reestablish diplomatic relations with Caracas. It also needs a steady, dependable supply of oil to help keep inflation at home in check. And Venezuela, lest we forget, boasts the world’s largest proven oil reserves.

Rather than trying to seize that oil through a regime change operation, why not just to business with the current occupants of the Palacio de Miraflores, which appear to be going nowhere any time soon?

For its part, Venezuela’s government needs the US to continue relaxing the economic sanctions that have been choking its economy for well over a decade. Today, Venezuela’s GDP is a tiny $102 billion, but last year it grew faster than most other Latin American economies, with a growth rate of 9% according to government data. This is down to one main reason: the loosening of the US-imposed shackles on the economy. In late 2022, the Biden government, desperate for oil prices to begin falling, allowed select oil companies, primarily Chevron, to begin selling Venezuelan oil again.

But while Trump’s re-engagement with Venezuela is a welcome step in the right direction, there are no guarantees it will last. US foreign policy under the new management is likely to be nothing if not erratic, especially with China, the US’s most important strategic rival, handily winning the battle for economic influence in Latin America, as even the Financial Times recently admitted.

Just yesterday, the US State Department announced the seizure of a second jet used by the presidency of Venezuela. From Venezuela Analysis:

The aircraft in question is a Dassault Falcon 200 located in the Dominican Republic, reportedly used by high-ranking Venezuelan officials, including the president, Vice-President Delcy Rodríguez and Defense Minister Vladimir Padrino López.

Last year, the US government confiscated a Dassault Falcon 900EX used by Maduro on official trips, with the Venezuelan government labeling the action at the time an act of “piracy.”

Recent US actions toward Venezuela reflect the mixed signals coming from the Donald Trump administration as the US president embarks on his second term. Earlier this month, Maduro welcomed White House Special Envoy Richard Grenell to the Miraflores Presidential Palace as part of a first engagement with the recently inaugurated administration.

The Trump administration’s “good cop, bad cop” treatment of Venezuela contrasts sharply with its more aggressive approach toward other countries in the region, particularly its southern neighbour and largest trade partner, Mexico, and Panama.

In recent days, the Trump administration has directly accused Mexico’s government of being “in alliance” with drug trafficking organisations before imposing 25% tariffs on all US imports of Mexican goods, which were admittedly lifted just hours later after Mexico’s Claudia Sheinbaum government agreed to a number of concessions relating to border security.  

On Wednesday, the Mexican military alerted of the presence of three US military vessels in waters near Ensenada, Baja California. A Boeing RC-135V Rivet Joint belonging to the US Air Force was also spotted conducting an unusual flight over the coasts of Baja California and Sinaloa. As The War Zone notes, “the Rivet Joint is one of America’s most capable intelligence-gathering assets and the appearance of one off the Mexican coast is a significant development.”

The stakes are also rising in the Trump administration’s attempted shakedown of Panama. Following Trump’s recent threats to take back the Panama Canal, the US State Department claimed on Wednesday that the Panama Canal Authority had agreed to let US government vessels cross the canal without paying fees after a visit by Marco Rubio to the country — a claim the canal authority roundly denies. One undeniable outcome of Rubio’s visit is that  Panama agreed to cancel its participation in the Silk Road economic agreement with China.

Similar pressure will presumably be applied to many other countries in the region in an attempt to reverse China’s growing economic influence in the region. As the retired Venezuelan career diplomat, scholar and author Alfredo Toro Hardy writes in a very interesting essay for the Global Policy Journal, after decades of US indifference to Latin America, the Trump administration’s newfound interest in its “back yard” as it seeks to retrench from further afield is unlikely to bode well for the region’s countries:

During his first term in office, he referred to unnamed countries of the region as “shithole places”, while disdainfully refusing to attend to the hemispheric summit that gathered its chiefs of state and government. Trump 2.0, however, has passed from overt contempt and arm twisting to frightful threats and appalling actions, with Mexico a primary target. The latter, notwithstanding the fact that Mexico represents the U.S.’ largest trade partner.

Amid the wave of threats and actions involving Latin America, the most serious have been a 25% increase on tariffs to Mexico’s exports to the U.S. as from February 2025, as well as the menace of ignoring its sovereignty to directly confront its drug traffickers. Formally announcing that the United States will take back the Panama Canal, notwithstanding the fact that after negotiations that involved several American administrations it was transferred to Panama by way of the Senate’s duly ratified 1977 Torrijos-Carter Treaties…

No other region of the world can produce the long list of historical grievances towards the U.S. that Latin America can. Although this is counterbalanced by admiration for America’s achievements and by existing cultural affinities, an underlying resentment remains present. By bringing back to memory the abuses of power through which the region was led into submission for most of its history, Trump is playing with high voltage emotions. This would seem particularly inconvenient for the U.S. at a point in time when Latin America has another power pole in hand to turn to, something it lacked in the past.