Deep Dive: Venezuela’s Oil, U.S. Custody, and the Quiet Redefinition of Sovereignty

This story is not really about oil.

It’s about who controls money, where that control sits, and how power is exercised when legal categories no longer quite fit the moment.

The United States has completed its first sale of Venezuelan oil since the removal of Nicolás Maduro, generating roughly $500 million in revenue. That much is clear. What is less obvious — and far more consequential — is what happened next.

The proceeds from that sale were not sent to Caracas. They were not deposited into Venezuela’s central bank. Instead, the funds are being held in U.S.-controlled bank accounts, with the primary account located in Qatar, described by U.S. officials as a neutral venue designed to reduce legal risk and prevent seizure by creditors.

At the same time, Venezuela’s acting president, Delcy Rodríguez, announced the creation of two sovereign funds — one for social protection and one for infrastructure — laying out how the money will be used inside the country. What she did not specify is how much of the revenue Venezuela currently controls, or when full custody will be transferred.

President Donald Trump, meanwhile, stated that the United States will keep a portion of the proceeds.

None of this is framed as punitive. None of it is described as permanent. And all of it is justified under the banner of restoring stability and democracy.

But taken together, these facts describe an arrangement that is highly unusual.

Venezuela remains a sovereign state under international law. Its oil is Venezuelan. Yet the revenue from that oil is being sold by the United States, held outside the country, shielded from creditors by executive order, and partially retained by a foreign government — while interim authorities in Caracas are tasked with planning domestic spending.

This is not a traditional sanctions regime. It is not a trusteeship. It is not a UN-authorized post-conflict framework.

It is something else.

Why This Matters

This matters because it reveals a quiet shift in how power is exercised in the modern international system. Control over territory is no longer the decisive lever; control over accounts is. Venezuela’s situation shows how sovereignty can remain formally intact while financial autonomy is functionally suspended — not through annexation or occupation, but through custody arrangements, executive orders, and carefully managed recognition gaps.

The oil is Venezuelan. The needs are Venezuelan. But the money moves only with external permission.

That distinction — between ownership and access, between recognition and control — is likely to outlast this particular crisis. And once normalized, it becomes a template, not an exception.

What Has Actually Been Put in Place

The structure now governing Venezuela’s oil revenue has several clear components:

• U.S.-marketed oil sales: The oil is sold through channels overseen by the United States, not directly by Venezuelan institutions operating independently in global markets.

• External custody of proceeds: Revenue from the first sale is held in U.S.-controlled accounts, with the primary account in Qatar rather than in Venezuela or the United States.

• Legal shielding: A U.S. executive order protects the funds from attachment by creditors and from certain legal claims while under U.S. control.

• Domestic spending plans without custody: Venezuelan authorities have announced how the funds will be used — through two sovereign funds — but do not publicly control the accounts holding the money.

• Partial U.S. retention: The U.S. president has said that the United States will keep a portion of the proceeds, though no treaty or international mandate governing that retention has been published.

Each of these elements can be explained on its own. What is new is their combination.

Sovereignty Without the Account

Under international law, Venezuela remains a sovereign state. Sovereignty over natural resources — including oil — is a foundational principle of the post-World War II international order. It does not disappear when a government changes, and it does not transfer automatically to an external power.

What can change, however, is access.

In Venezuela’s case, sovereignty over oil exists in principle, but control over the revenue stream does not fully exist in practice. 

The funds are real. The oil has been sold. But access to the money is conditional — mediated through U.S. oversight, licenses, and custody arrangements.

This creates a form of sovereignty without liquidity.

Venezuela is treated as sovereign enough to:

• plan domestic spending,

• establish public funds,

• announce social priorities.

But not sovereign enough to:

• receive export proceeds directly,

• place those proceeds in domestic institutions,

• or allow its courts or banks to exercise authority over the funds.

That asymmetry is the core of the story.

Recognition, Carefully Left Unfinished

Part of what makes this arrangement possible is the unresolved question of recognition.

The United States has removed Maduro but has not cleanly resolved the legal status of the Venezuelan state in international financial terms. The interim authority is treated as functional, but not fully empowered in the way a universally recognized government would be.

This ambiguity is not accidental.

Full recognition would likely trigger:

• immediate creditor actions,

• competing legal claims over state assets,

• arbitration enforcement in multiple jurisdictions.

Non-recognition, meanwhile, allows the United States to:

• manage funds externally,

• shield them through domestic law,

• and decide when and how access is granted.

The result is operational cooperation without full legal handover.

The Role of Qatar

Qatar’s role is often described as “neutral,” but neutrality here is functional, not political.

Venezuela owes an estimated $170 billion to a wide range of creditors — from bondholders to oil companies to states. Any account located in Venezuela, or even in the United States, would be immediately vulnerable to seizure through litigation.

By placing the funds in Qatar under U.S. control:

• the money is kept out of reach of most creditor actions,

• jurisdictional exposure is reduced,

• and control remains centralized.

This is not about trust in Qatar. It is about jurisdictional insulation.

The Executive Order as the Legal Backbone

The U.S. executive order shielding Venezuelan oil revenue is not an international agreement. It is a domestic legal instrument.

It does three things:

1. Blocks attachment and seizure of the funds.

2. Overrides competing legal claims while the money is under U.S. control.

3. Centralizes authority in the executive branch.

What it does not do is resolve questions of international legality, sovereignty, or long-term ownership. It provides temporary legal cover, not a durable settlement.

So What Is This, Exactly?

It is not occupation. It is not annexation. It is not a classic sanctions regime.

It is financial administration without formal trusteeship.

The United States has intervened not by taking territory, but by managing revenue flows. Democracy is the justification. Stability is the language. But the mechanism is financial.

Venezuela’s oil is producing cash. The cash exists. But sovereignty stops at the account.

The Broader Implication

This arrangement signals something larger than Venezuela.

It suggests that in the current international system, control over money can be separated from recognition of the state, and exercised through financial architecture rather than diplomacy or force alone.

That has implications not just for Venezuela, but for any country with:

• significant natural resources,

• heavy external debt,

• contested political legitimacy,

• and limited leverage over the jurisdictions where money ultimately moves.

Once power is exercised this way, it becomes easier to repeat.

The Bottom Line

Venezuela’s oil sale is being described as a step toward recovery.

But recovery usually begins with control.

Here, the oil is Venezuelan. The needs are Venezuelan. The plans are Venezuelan.

The money is not.

And that distinction — quiet, technical, and easy to miss — is where the real story lives.