Treasury Intervenes in Citgo Sale Process
The U.S. Treasury Department has extended protection for Citgo Petroleum from a court-ordered sale to Elliott Management six times since January, according to Fortune. The extension of this protection leaves the fate of the Houston-based oil refiner uncertain as it depends on whether the Trump administration opts to hand the company to Elliott or return control to Venezuela.
The decision regarding the sale license rests with the Treasury Department’s Office of Foreign Assets Control (OFAC). This regulatory authority effectively serves as a gatekeeper for the transaction, which was previously mandated by a federal judge but requires executive approval to close. The administration's repeated delays suggest a complex evaluation of the geopolitical implications surrounding the asset.
Legal Challenges and Judicial Orders
In November 2025, a Delaware federal judge ordered the sale of Citgo to Elliott Management and its affiliate Amber Energy. The ruling determined that Citgo could be held liable for Venezuelan government debts. Under the court-approved plan, the sale would generate $9 billion to pay off a small number of Venezuela’s creditors.
Attorneys for Venezuela and its state-owned oil company, PDVSA, have appealed Judge Leonard Stark’s sale order. The legal team argued that the court-appointed neutral adviser was not neutral because outside consulting firms earned $170 million in fees from clients tied to Elliott.
Oral arguments regarding this appeal are scheduled for October. However, legal analysts express skepticism about Venezuela’s prospects for victory. This skepticism stems from the 3rd Circuit Court of Appeals’ history of affirming Stark’s rulings or dismissing Venezuela’s challenges.
Executive and Expert Perspectives
The political landscape surrounding Citgo shifted following the ouster of former Venezuelan leader Nicolás Maduro in early January. Energy Secretary Chris Wright applauded the forced sale to Elliott Management and its founder Paul Singer at that time, signaling initial executive support for the liquidation.
Despite this earlier support for the sale, experts question whether the transfer is mandatory. Richard Nephew, a sanctions expert at Columbia University’s Center on Global Energy Policy, stated there is an open question as to whether the Citgo sale is a requirement.
José Ignacio Hernandez, a Harvard law professor and former special counsel for Venezuelan opposition leader Juan Guaidó, argued against proceeding with the sale. Hernandez said keeping Citgo’s protection avoids disrupting ongoing cooperation between the U.S. and Venezuela.
Hernandez cited Secretary of State Marco Rubio’s three-step strategy for Venezuela, which includes stabilization, recovery, and transition. He argued that a license authorizing the sale would disrupt these phases, potentially undermining broader diplomatic efforts in the region.