WASHINGTON — The Trump administration's unconventional handling of $500 million in Venezuelan oil revenues, initially parked in Qatar, has ignited debates over which government in the South American nation the United States will ultimately recognize following the capture of former President Nicolás Maduro.
The arrangement, which involves close collaboration with an interim government led by Delcy Rodríguez that the U.S. does not officially recognize, comes amid ongoing questions about Venezuela's political transition, governance, and control over its vast oil resources. President Donald Trump, during his first term, recognized the opposition-led National Assembly elected in 2015 as the sole legitimate representative of the Venezuelan people, a stance that now complicates the administration's pragmatic dealings with Rodríguez's regime.
On January 9, Trump issued an executive order mandating that proceeds from Venezuela's oil sales be held in a U.S. Treasury Department account, declaring the funds as the sovereign property of the government of Venezuela but held in U.S. custody. However, the order leaves ambiguous which Venezuelan government it refers to, creating legal and diplomatic tensions.
Scott Anderson, an international law expert who previously served with the State Department and the U.S. Embassy in Baghdad under President Barack Obama, said the funds should theoretically fall under the control of the 2015 National Assembly due to the U.S.'s prior recognition. "Once the money arrives in the U.S., it should in theory be under the control of the opposition National Assembly," Anderson told CNBC. He recently published a legal analysis of the plan, emphasizing that the Rodríguez government "in theory has no voice in how any Venezuelan funds in the United States are spent."
The administration's cooperation with Rodríguez includes an agreement to ship 50 million barrels of crude oil to the U.S., with sales controlled by Washington to maintain leverage over Caracas for implementing reforms. Energy Secretary Chris Wright stated that this setup "will continue indefinitely" to ensure compliance. A Trump administration official confirmed to CNBC that an account has been established for the government of Venezuela at the Treasury Department, where "future revenues derived from the sale of Venezuela natural resources will come into and go out of the account." The initial $500 million held in Qatar has since been transferred to this account, the official added.
Secretary of State Marco Rubio addressed these complexities during testimony before the Senate Foreign Relations Committee on January 28. He explained that the funds were temporarily held in Qatar — a nation that recognizes the Maduro regime as legitimate — to sidestep immediate recognition issues. "We have an issue we're working through on recognition," Rubio said. "You have to recognize a government, but we don't recognize this government. We recognize the 2015 National Assembly, so we have to find some creative way legally to meet that standard."
Rubio described the U.S. approach as pragmatic, noting a "respectful and productive" line of communication with Rodríguez. "We are just acknowledging reality, and that is you have to work with the people that are in charge of the elements of government," he told senators. A written agreement is in place with the Rodríguez government on oil sales, he added, framing the collaboration as part of a "transition and stabilization" phase in Venezuela.
Under the current mechanism, Caracas will submit a budget for U.S. review, after which sanctions could be waived to allow disbursement of oil revenues from the blocked account. Rubio outlined restrictions: The U.S. will specify upfront what the funds cannot be used for, and an audit process will ensure appropriate spending. The Export-Import Bank of the United States could oversee audits, though details remain unfinalized. "I understand it's novel, but it's the best we could come up with in the short term," Rubio said, stressing that this is not a permanent solution.
Long-term, the administration aims to foster a normalized oil industry in Venezuela, where companies can move crude directly into the global market without U.S. intervention as a middleman. A Trump official reiterated to CNBC that the U.S. "continues to work toward a long-term solution to ensure oil revenues may flow and be utilized for Venezuela's people and economic stability." Rubio echoed this, saying the ultimate goal is to "transition away from Venezuela's current system." "This is not the end state that we want," he told the Senate.
Democrats in Congress have raised sharp concerns about the legality of the arrangement, particularly its reliance on the International Emergency Economic Powers Act (IEEPA). On January 28, Rep. Sean Casten, D-Ill., along with a dozen other lawmakers, sent a letter to U.S. oil companies warning of potential legal risks if they participate in the Venezuelan oil sales program. Casten criticized the administration for not providing Congress with a full explanation of the legal authority invoked under IEEPA, which allows the president to confiscate foreign property only during armed hostilities or in response to attacks on the U.S.
"The Trump administration has not provided Congress with a full explanation of the legal authority it invoked," Casten said in the letter. Democrats have questioned how IEEPA applies when Rubio has explicitly stated that the U.S. is not at war with Venezuela.
In response, Rubio clarified to the Senate that the U.S. is not confiscating Venezuela's property. "The money never enters our hands," he said. "We only control the disbursement of the money. We don't control the actual money."
The capture of Maduro, which occurred in recent months, has accelerated these discussions, but Venezuela's political crisis dates back years. The 2015 National Assembly elections marked a turning point, with opposition forces gaining a majority amid widespread discontent with Maduro's socialist policies and economic mismanagement. Trump's 2019 recognition of the assembly, led at the time by Juan Guaidó as interim president, isolated Maduro internationally and imposed crippling sanctions on his regime.
Now, with Maduro in U.S. custody, the remnants of his government under Rodríguez hold de facto power over key institutions, including the state oil company PDVSA, which controls Venezuela's vast reserves — the world's largest proven oil deposits. The U.S. move to control oil sales aims to prevent funds from fueling repression or corruption, but it risks alienating the opposition assembly, which views itself as the rightful steward of national assets.
Experts like Anderson warn that without resolving recognition, the setup could face court challenges or international backlash. Qatar's role as a temporary custodian highlights the diplomatic tightrope: While Doha maintains ties with Maduro loyalists, it has also mediated U.S. interests in the region, including hostage negotiations.
As the transition unfolds, the oil revenues — projected to generate billions annually from the 50 million barrels already en route — could either stabilize Venezuela's economy or become a flashpoint in U.S. domestic politics. Democrats' scrutiny may lead to congressional hearings, while the administration pushes for quick reforms in Caracas. For now, the funds sit in a Treasury account, a symbol of Washington's delicate balancing act between principle and pragmatism in a nation teetering on the edge of renewal or renewed chaos.
The broader implications extend to global energy markets, where Venezuelan oil could alleviate supply pressures if fully reintegrated. Yet, until recognition is clarified, companies remain wary, and Venezuela's people — enduring hyperinflation and shortages for years — await clarity on who will steer their resource-rich future.