Venezuela’s government has taken a major step toward opening its long-state-controlled oil sector to private and foreign companies — including U.S. firms — in a move closely aligned with one of Donald Trump’s key demands.

On Thursday, Venezuelan lawmakers gave preliminary approval to new oil legislation that would loosen decades of strict state control over hydrocarbons. If fully adopted, the reform would allow private companies to operate and market oil independently, reduce royalties in certain cases, and permit international arbitration for investment disputes — all designed to attract foreign capital and revive Venezuela’s struggling industry.

Why It Matters

• Venezuela has some of the world’s largest proven oil reserves but years of mismanagement and isolation drove production sharply down.

• Opening the sector could boost output and investment after years of sanctions and economic contraction.

• The move directly responds to Trump’s push for U.S. oil companies to return and invest, signaling a thaw in Washington-Caracas relations.

Context: U.S. Role & Market Moves

In a related shift, the U.S. approved China’s purchase of Venezuelan oil at fair market prices, reorienting exports away from earlier discounted deals under previous Venezuelan leadership.

Meanwhile, global trading firms like Vitol and Trafigura are preparing to export Venezuelan crude as part of newly licensed deals aimed at reintegrating the nation’s oil into international markets, reflecting accelerating changes in global energy flows.