After overseeing the dramatic removal of Venezuelan President Nicolás Maduro last month, U.S. President Donald Trump declared that the United States would move swiftly to capitalize on Venezuela’s vast oil reserves, the largest in the world. Framing the political shift as both a geopolitical and economic opportunity, Trump signaled his intention to open the door for American energy companies to help revive the country’s struggling oil industry. Yet despite the bold rhetoric, major questions remain about whether such an ambitious undertaking makes financial sense for U.S. firms.
Speaking at a White House news conference following meetings with energy executives, Trump pledged that oil extraction in Venezuela would reach unprecedented levels. His comments came after Venezuelan lawmakers approved legislation allowing expanded foreign investment in the country’s energy sector, potentially clearing the way for American companies to re-enter a market long plagued by instability and sanctions.
Economists say the administration’s strategy is twofold: boost global oil supply to help reduce fuel costs for American consumers while also providing a revenue stream for a more U.S.-friendly government in Caracas to rebuild an economy battered by years of mismanagement. However, the reality on the ground presents daunting challenges.
Venezuela’s state-owned oil giant, PDVSA, once a pillar of the nation’s economy, has deteriorated sharply. Under both Maduro and his predecessor, Hugo Chávez, oil revenues were heavily directed toward social programs, while infrastructure investment lagged. As a result, production has fallen dramatically. Analysts note that Venezuela currently produces roughly 1.5 million barrels per day less than it did a decade and a half ago, with years of neglected maintenance leaving equipment degraded and outdated.
Although Venezuela officially claims reserves of about 300 billion barrels, skepticism lingers. During Chávez’s presidency, reserve estimates ballooned after the reclassification of previously uneconomical heavy crude deposits. At the time, high oil prices—often near $100 per barrel—made such reserves appear viable. Today, with prices hovering closer to $65, the economics are less compelling. In 2023, Venezuela exported just over 211 million barrels of oil worth around $4 billion, a fraction of the revenues generated by major producers such as Saudi Arabia, which earned $181 billion in exports during the same period.
Complicating matters further, Venezuela’s crude is heavy and sulfur-rich, making it more expensive to extract and refine compared to lighter grades. Restoring infrastructure could require at least $100 billion in investment, according to administration estimates. Meanwhile, nearly eight million Venezuelans have fled the country amid economic collapse, including many skilled engineers essential to oil operations.
U.S. companies are also wary due to past experiences. In 2007, firms including ExxonMobil and ConocoPhillips saw their assets seized after refusing to cede majority control to PDVSA. Although international courts later awarded billions in damages, those payments remain outstanding. The current political transition, with former Vice-President Delcy Rodríguez serving as interim leader, has not erased concerns about potential expropriation.
Adding to investor anxiety, U.S. Energy Secretary Chris Wright has indicated there will be no security guarantees for American firms operating in Venezuela, where armed groups known as colectivos often exert influence. Without stronger assurances or financial incentives, executives appear reluctant to commit capital.
ExxonMobil CEO Darren Woods recently described Venezuela as “uninvestable” under current conditions. Analysts suggest that unless oil prices rise substantially or political stability improves, a large-scale industry revival remains uncertain.
While a rebound in Venezuelan production could theoretically ease global oil prices, experts caution that outcomes will depend heavily on scale, timing, and geopolitical dynamics. For now, despite the administration’s enthusiasm, the future of U.S. investment in Venezuela’s oil fields remains far from certain.
