US President Donald Trump has seized control of Venezuela's vast oil reserves following the capture of President Nicolás Maduro, announcing an immediate transfer of up to 50 million barrels of oil to the United States while pressuring American oil companies to invest billions in reviving the country's collapsed energy sector.
Trump declared on Truth Social that Venezuela's "Interim Authorities" will turn over between 30 and 50 million barrels of "High Quality, Sanctioned Oil" to the US, worth up to $2.8 billion. The US will sell the oil at market price, with proceeds controlled by Trump "to ensure it is used to benefit the people of Venezuela and the United States," he stated. Trump directed Energy Secretary Chris Wright to execute the plan immediately.
The move follows a US military operation over the weekend that captured Maduro in Caracas. Venezuelan officials reported at least 24 security officers killed during the raid, while the Pentagon confirmed seven US service members were injured.
Ambitious production plans face reality check
Trump outlined sweeping plans for US oil companies to restore Venezuela's production, claiming American firms could be "up and running" within 18 months. He told NBC News that companies would spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.
Venezuela holds the world's largest proven oil reserves at roughly 300 billion barrels. But decades of mismanagement, corruption, and US sanctions decimated production from 3.5 million barrels per day in 1999 to just one million today.
Industry experts are deeply skeptical of Trump's timeline. Dan Pickering, chief investment officer at Pickering Energy Partners, estimates it will take at least three years for any production increase, with meaningful output potentially not arriving until 2028 or 2029.
Investment requirements are staggering. Rystad Energy estimates that restoring production to three million barrels per day would require at least $185 billion and over 16 years. Even maintaining current output at 1.1 million barrels daily needs around $53 billion over the next 15 years.
Oil companies remain cautious
Major US oil companies are staying non-committal despite presidential pressure. Chevron, the only American major currently operating in Venezuela, said it "remains focused on the safety and wellbeing of our employees [...] in full compliance with all relevant laws and regulations."
ConocoPhillips stated it would be "premature to speculate on any future business activities or investments," while ExxonMobil and others declined to comment. Both ExxonMobil and ConocoPhillips left Venezuela after Hugo Chávez nationalized the oil industry in 2007, and ConocoPhillips is still seeking over $10 billion in arbitration compensation.
The Trump administration is scheduling meetings with oil executives to discuss Venezuela. Energy Secretary Chris Wright plans to meet representatives from Chevron, ConocoPhillips, and ExxonMobil at the Goldman Sachs Energy Conference in Miami. The White House scheduled an Oval Office meeting for Friday.
Industry sources say companies are demanding ironclad guarantees before investing. "Oil companies will be looking for security guarantees," one person familiar with discussions told Politico. Companies want assurance of reimbursement, protection from future nationalization, and clarity on Venezuela's political transition to a stable, rule-of-law government.
Trump suggested US taxpayers could reimburse companies for infrastructure repairs, stating oil firms would spend money and "get reimbursed by us or through revenue." But the White House has not provided details on how such guarantees would work.
Market and geopolitical implications
The energy sector reacted positively to the Venezuela developments. Chevron shares jumped 5.1 percent Monday, while ExxonMobil rose 2.2 percent. Oil refiners and service companies saw even larger gains, with some stocks rising up to 10 percent.
However, crude oil prices barely moved, with international benchmark Brent trading around $60.50 per barrel. The muted response reflects market skepticism about rapid production increases and concerns about global oil oversupply.
Diverting Venezuelan crude from China to US refineries could reshape global energy flows. China has bought the most Venezuelan oil for the past decade, receiving shipments as loan repayment. Increased Venezuelan exports to US Gulf Coast refineries would likely displace Canadian heavy crude imports.
Patrick Galey of Global Witness warned that US Gulf Coast installations could refine "the heavy Venezuelan crude [...] likely going to undercut domestic producers [...]" Some American oil companies may resist investments that compete with their own domestic production.
Substantial obstacles remain
Beyond financial challenges, Venezuela faces severe infrastructure decay. Years of underinvestment have left pipelines rusting and facilities degraded. Jorge León of Rystad Energy said "a rapid recovery in Venezuelan oil production in the short term is highly unlikely."
Political uncertainty compounds the problem. Delcy Rodríguez, Venezuela's acting president, has pushed back against US demands, stating in a televised address that "no external agent" governs Venezuela. Maduro loyalists continue contesting US authority.
International sanctions remain in place, and the legal framework for foreign investment is unclear. Companies remember Venezuela's history of nationalizing foreign assets twice, creating wariness about long-term commitments.
Climate experts also warn of consequences. Paasha Mahdavi said increased Venezuelan oil production would be "terrible for the climate, terrible for the environment." John Sterman of MIT added that "climate damages [...] will almost certainly outweigh any short-term economic benefit [...]"
Elliott Abrams, Trump's former special envoy to Venezuela, believes the president is "exaggerating" the likelihood of rapid company investment. "The boards of these companies will make the decisions," Abrams said, not the president.
Despite the challenges, some analysts see potential. Tony Franjie of SynMax Intelligence believes modern drilling techniques could accelerate recovery faster than pessimists expect, with small production increases possible within a year. But he acknowledges reaching pre-decline levels requires substantial time and investment.
The coming weeks will reveal whether Trump's bold Venezuela gambit can overcome the formidable economic, political, and logistical obstacles standing between ambition and reality.
Note: This article was created with Artificial Intelligence (AI).
