Sanctions Relief Complicates Court-Ordered Sale
The Trump administration has extended protection for Citgo Petroleum six times since January, according to reports, raising questions about whether a court-ordered sale of the Houston-based refiner to Elliott Management will proceed. The extension of sanctions relief by the Treasury Department’s Office of Foreign Assets Control (OFAC) effectively keeps Citgo under Venezuelan control, despite a November 2025 ruling that approved its transfer to U.S. creditors.
In November 2025, a Delaware federal judge ordered the sale of Citgo Petroleum to Elliott Management and its affiliate, Amber Energy. The court ruled that Citgo could be held liable for debts owed by the Venezuelan government and approved a transaction valued at $9 billion intended to pay off a small number of Venezuela’s numerous creditors. At the time, the sale required only approval from the Trump administration to close.
Energy Secretary Chris Wright initially supported the forced sale in November 2025, calling it "fantastic" and describing it as a win-win deal that could help drive down gas prices for American consumers. The transaction would have marked the first time in nearly 40 years that Citgo and its U.S. refineries came under American ownership.
However, eight months after the initial ruling, the fate of the company has become entangled with geopolitical considerations. The Treasury Department’s ability to grant or deny a sale license allows it to either deprive Venezuela of its assets or allow Citgo to remain part of the nation’s potential revitalization efforts.
Legal Challenges and Geopolitical Implications
Attorneys representing Venezuela and its state-owned oil company, PDVSA, have appealed Delaware District Judge Leonard Stark’s sale order. Their appeal argues that the court-appointed neutral adviser was not neutral because outside consulting firms earned $170 million in fees from clients tied to Elliott Management.
Oral arguments regarding this appeal are scheduled for October. The 3rd Circuit Court of Appeals has a history of affirming Stark’s rulings or dismissing Venezuela’s challenges, according to the research notes.
Richard Nephew of Columbia University’s Center on Global Energy Policy stated there is an open question as to whether the Citgo sale remains a strict requirement given the current administrative actions. Meanwhile, Jose Ignacio Hernandez, a Harvard law professor and former special counsel for Venezuelan opposition leader Juan Guaidó, argued that keeping Citgo’s protection avoids disrupting ongoing cooperation between the U.S. and Venezuela.
Hernandez noted that maintaining the status quo would not disrupt Secretary of State Marco Rubio’s three-step strategy of stabilization, recovery, and transition. The administration's decision to extend protections suggests a shift from the initial enthusiasm expressed by Energy Secretary Wright eight months prior.