The Citgo sale has stalled as the Trump administration repeatedly shields the Venezuelan-owned oil company from a court-ordered takeover by activist hedge fund Elliott Management, leaving Washington with a powerful bargaining tool in its dealings with Caracas.
A Delaware federal judge ordered the sale in November 2025 after ruling that Citgo could be held liable for debts owed by the Venezuelan government. The proposed transaction would transfer control to Elliott and its affiliate, Amber Energy, with about 9 billion dollars directed towards a limited group of Venezuela’s creditors.
The deal requires approval from the US Treasury Department’s Office of Foreign Assets Control (OFAC). Since January, the department has extended Citgo’s protection from the sale six times, but has not granted the necessary licence.
The delay followed the ousting of former Venezuelan leader Nicolás Maduro in early January and the emergence of an interim administration that is more closely aligned with the United States. Although Energy Secretary Chris Wright had welcomed the forced sale, the administration now appears to be weighing the strategic value of retaining control over its timing.
“There’s an open question now as to whether or not the Citgo sale is a requirement,” said Richard Nephew, a sanctions expert at Columbia University’s Center on Global Energy Policy.
Jose Ignacio Hernandez, a Harvard law professor and former special counsel to Venezuelan opposition leader Juan Guaidó, said maintaining the company’s protection avoided disrupting co-operation between Washington and Venezuela.
“Any licence authorising the [Citgo] sale order will definitely disrupt these three phases,” he said, referring to Secretary of State Marco Rubio’s stated strategy for Venezuela of stabilisation, recovery and transition.
Legal challenge to the Citgo sale
Venezuela and its state-owned oil company, PDVSA, have appealed against the Delaware ruling. They argue that the court-appointed adviser who designed the auction and selected Elliott’s bid was not sufficiently independent.
The Venezuelan parties and a rival bidder say the sale order should be overturned because the adviser hired consultancy firms that had received 170 million dollars in fees from clients linked to Elliott. Oral arguments are due before the 3rd Circuit Court of Appeals in October.
Venezuela’s legal challenges have made little headway in the appeals court during almost a decade of proceedings. Analysts therefore remain sceptical about its chances of overturning the ruling.
If the appeal fails, the decision would rest largely with OFAC. It could authorise the sale and remove Venezuela’s most valuable asset from its control, or refuse permission and allow Citgo to remain part of the country’s economic recovery.
“What does Trump gain if he keeps the [Citgo] protection in place? He gets a bargaining chip that is very powerful, that says, ‘Don’t deviate from this path or you’ll pay for it,’” said Jose Enrique Arrioja, senior director of policy at the Council of the Americas.
That leverage is being exercised while Venezuela’s interim president, Delcy Rodriguez, depends on support from the Trump administration. The Chavista political machinery that has governed the country remains largely intact.
In March, Ms Rodriguez appointed Asdrúbal Chávez, a cousin of the former president Hugo Chávez, to lead Citgo’s parent company, despite his US visa having been revoked in 2018. OFAC has since blocked further leadership changes at Citgo and its parent companies.
Why Citgo matters to Venezuela and the US
Citgo was founded in Oklahoma 116 years ago. PDVSA bought half of the company in 1986 and the remainder in 1990, giving Venezuela access to the US market and refineries designed to process its heavy crude.
The company operates refineries in Texas, Louisiana and Illinois which have produced roughly 5 per cent of US refined products. Its profits became an important source of income for Hugo Chávez’s government, but later made it a target for creditors as Venezuela’s debts grew.
The Delaware auction awarded control to Elliott and Amber Energy, which offered 5.9 billion dollars for creditors whose assets were expropriated under Mr Chávez and up to 2.8 billion dollars for holders of defaulted bonds.
Amber has pledged to invest 11 billion dollars in modernising and expanding Citgo, including a 1 billion dollar expansion of its Texas refinery expected to produce an additional two billion gallons of fuel a year. Elliott Management and Amber Energy declined to comment specifically on the delay.
Venezuelan representatives argue that the agreed price is far below Citgo’s current value. PDVSA lawyers cited a valuation of more than 15 billion dollars in May, after higher refining revenues helped push the company’s income to five times its level between the first and second quarters of the year.
Venezuela’s debt is estimated at 240 billion dollars, including government bonds, expropriation claims, unpaid trade debts and loans from China, Russia and development banks. Selling Citgo for nearly 9 billion dollars would address only about 4 per cent of that burden while removing an asset that could support the country’s recovery.
Julian Cardenas Garcia, a member of PDVSA’s ad hoc board, said: “Transferring it to a U.S. investor would be depriving Venezuela of a strategic asset, and to solve what? We turned Citgo from a company that was sunk in debt into a profitable company now with excess cash and operational excellence.”
Martin Muhleisen, a senior fellow at the Atlantic Council and former International Monetary Fund official, said an early sale could give Elliott the most valuable part of Venezuela’s assets before a wider debt restructuring.
“They would get the cherry on top, and everybody else would have to do with the rest of the cake,” he said. “That would not be helpful, because [other creditors] would really try to squeeze Venezuela even harder for what’s left.”
The dispute could also become a test of presidential authority. If the appeals court upholds the sale but the administration refuses to licence it, Amber or other creditors could argue that the executive branch is interfering with a federal court’s power to enforce its order.
Legal and policy experts said such a case could develop into a constitutional dispute over the separation of powers and feed into the administration’s wider argument for an expansive interpretation of presidential control.
“At this stage, Citgo shifts from the geopolitical chessboard to the domestic one,” Mr Hernandez said. “It doesn’t have anything to do with Venezuela. It has everything to do with domestic politics.”
