Russian state media outlet RT posted on X about the US Treasury Department’s new “Venezuela General License 48,” which allows US companies to provide “goods, technology, software, or services for the exploration, development, or production of oil or gas in Venezuela,” with two conditions attached.
The first is that any contract their partners enter into must be governed by US law. The second prohibits transactions with Russia, Iran, North Korea, Cuba and China. That’s why RT interpreted the license as the “US Ban[ning] Venezuelan Oil Producers From Doing Business With Russia & China.”
That interpretation is reasonable since the Trump Doctrine is shaped by US Undersecretary of Defense Elbridge Colby’s “Strategy of Denial,” which, in its simplest form, seeks to deny strategic resources to US rivals such as the countries listed above.
This is especially true of China, America’s systemic rival, though Trump has sent mixed signals. Trump recently welcomed Chinese investment in Venezuela’s energy industry, but that may have been an effort to manage Sino-US rivalry amid ongoing trade talks.
Trump wants a deal with Chinese leader Xi Jinping, which would be more difficult if he openly declares his intent to deny China continued access to Venezuela’s energy resources. It therefore makes strategic sense for the US to implement this policy quietly through the new license.
Even before its promulgation, Russian Foreign Minister Sergey Lavrov complained that “our companies are being openly forced out of Venezuela,” suggesting the policy was already being informally implemented by Delcy Rodríguez’s government under US pressure.
Apart from Cuba, none of the countries prohibited under the new license depend on Venezuelan energy, but excluding them from the industry serves another purpose, arguably more strategic than denying them access to its resources.
Trump boasted earlier this month that India had agreed to stop purchasing Russian oil as part of the terms of its trade deal with the US and replace those imports with American and possibly Venezuelan oil.
This writer previously assessed that India is expected to only slowly reduce its Russian oil imports, in part because the Venezuelan ambassador to China confirmed Caracas’ interest in continuing exports there and Trump welcomed Chinese investment in the sector.
If RT’s interpretation of the license is correct — and Lavrov appears to believe so after criticizing the US prohibition on Venezuelan energy transactions with Russia during a recent appearance at the State Duma — then India could purchase the 642,000 barrels per day of oil that China imported on average last year.
That figure represents more than half of the 1 million barrels per day India imported from Russia last month, potentially leading to a sharp reduction in the revenue Russia expected from those sales.
The US is actively monitoring India’s direct and indirect imports of Russian oil under the condition attached to its decision to lift last summer’s 25% tariff, which was imposed because of those dealings.
By cutting China out of Venezuela’s energy industry and consequently enabling India to receive those imports, the US is facilitating a rapid reduction in India’s purchases of Russian oil and could potentially drive them to zero if a similar policy is extended to Iran’s oil exports to China.
A version of this article was first published on Andrew Korybko’s Substack and is republished here with editing for clarity and fluency. Become an Andrew Korybko Newsletter subscriber here.
