Witness: U.S.-supervised sales of sanctioned Venezuelan oil aim to stabilize country and fund services

An unidentified witness (Witness) told a committee the United States has negotiated a short-term arrangement to allow some sanctioned Venezuelan oil to be moved to market under U.S. oversight, with proceeds held and released to pay essential services in Venezuela.

The witness said the arrangement, part of an effort to avoid a collapse or mass displacement after the removal of the previous leadership, is meant to reduce immediate humanitarian and fiscal pressure. "We will allow you to move it to market at market prices," the witness said, describing oversight of proceeds and monthly budget requests from Venezuelan authorities. The witness added that the mechanism is temporary and is intended to ensure that oil revenues benefit "the Venezuelan people," not the prior regime.

Why it matters: The witness portrayed the prior Venezuelan government as an operational base for external adversaries, saying it had become "for Iran, their primary spot of operation in the Western Hemisphere" and likewise for Russia and China. The committee was told that such external ties, together with cooperation with insurgent groups, contributed to an "untenable" strategic risk in the hemisphere.

Details from the testimony: The witness said Venezuela had been selling oil to China at a significant discount—described in testimony as "about $20 a barrel" in some cases—and that the new arrangement is intended to recover market pricing and put oversight on how proceeds are used. The witness described Venezuela facing storage limits and a fiscal crunch and said the short-term plan lets Venezuela sell oil to meet immediate needs like police pay and sanitation.

The witness also said Venezuela pledged to use a substantial share of proceeds to purchase medicine and equipment directly from the United States. On industry reforms, the witness credited Venezuelan authorities with passing a "new hydrocarbon law" that removes many Chavez-era restrictions on private investment; the witness called the law "a big step" but said it may not be sufficient to attract the full level of needed investment.

Human-rights and political steps: The witness said political prisoners were being released—"by some estimates, up to 2,000"—and that some of those released are beginning to participate in political life. The witness acknowledged the releases are happening "probably slower than I would like them to, but they are releasing them."

Outlook and limits: The witness cautioned that the desired end state—"a friendly, stable, prosperous, democratic Venezuela" with free and fair elections—will take time and reiterated the arrangement is a short-term step toward a longer recovery and transition. "We're not gonna get there in 3 weeks," the witness said, adding that progress in the first month was better than expected but that the path forward will be complex.

The hearing did not record a committee vote or formal action; the testimony focused on the U.S. oversight approach, short-term economic measures, legislative changes in Venezuela, and political prisoner releases.