Donald Trump picked fellow-Republican Marco Rubio as Secretary of State which could shake-up global oil markets (a move that hints at stricter rules for Iran and Venezuela). The Cuban-american senator known for his hard-line views might re-shape US foreign policy
The oil-market landscape changed a lot under current administration: Iranʼs exports went up and Venezuela got some breathing room. About two years ago Bidenʼs team started giving out special permits to big companies like Chevron and Repsol letting them work with Venezuelan oil. Last month Venezuelaʼs oil output hit a four-year high reaching 950k barrels daily
The new administration might use the fresh-made SHIP law to crack down on foreign ports and refineries that work with Iranian oil exports; however China remains a key factor. Trump talked about sanctions risks at NY Economic Club this fall: “we need to be smart about dollar position in world trade“
Hereʼs what might change for Venezuela under Rubio:
- Current oil delivery permits could get canceled
- Stricter rules for foreign companies
- Less room for compromise with Maduro
- Harder push for democratic changes
The implementation wont be simple since many departments need to work together: State Treasury and Commerce all play roles in sanctions. They also need to keep good relations with European and Asian partners who might not support stricter rules
Any tough moves could make China unhappy – its been buying most of Iranian oil lately. Venezuela also built new partnerships to sell its oil including deals with Iran so pushing too hard might backfire on US migration goals