After a military operation that led to the capture of President Nicolás Maduro, President Donald Trump has come up with a daring plan to take over Venezuela's failing oil business. The idea is to get American companies to come in and bring the industry back to life after years of decline.
Experts are quick to say, though, that this method won't magically lower oil costs overnight. Venezuela's oil infrastructure is in horrible repair because it hasn't been taken care of in a long time, because of corruption, and because of heavy sanctions from other countries. It could take years before production goes up significantly, and it could take a lot of effort and money to make things better.
“We’re going to have our very large United States oil companies go in, spend billions of dollars, fix the badly broken oil infrastructure and start making money for the country.
Venezuela is only making about 1.1 million barrels of oil a day right now, which is a substantial decline from when it was at its best. Some business experts predict that with the right push, the country could swiftly double or even quadruple that amount, bringing it back to levels it hasn't seen in decades.
Political Chaos and Infrastructure Decay Slow Down Revival Efforts
One of the biggest issues is getting the big oil firms in the US to agree. Without any kind of certainty, these companies won't commit billions of dollars into a system that could alter at any time. Venezuela's politics are still a mess. Trump says the U.S. is in charge now, but other individuals in the country don't agree. The vice president of Venezuela, for example, was making a lot of noise about putting Maduro back to power until the Supreme Court stepped in and named her acting leader. Investors are worried because everything is so variable.
Patrick De Haan, GasBuddy's lead petroleum analyst, explains it clearly: the latest U.S. military strikes didn't immediately damage the oil facilities, but they've been coming apart for a long time. It will take a long time to rebuild, and it will need a lot of planning and resources.
Phil Flynn, a market analyst with the Price Futures Group, said that if the U.S. can get things under control over the next day or so, people might start to feel hopeful.
As of early January 2026, WTI crude is hovering around $57 per barrel, with Brent near $60, showing little change despite the events in Venezuela.
The global market has plenty of oil right now, and experts say the surplus will keep prices down for months.
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OPEC+ is holding back on big production hikes, but overall supply is still outpacing demand. This oversupply makes any quick jump in Venezuelan oil less likely to push prices up soon. Chevron, already working there for years, says they're just watching closely and following all rules.
Massive Reserves but Huge Challenges in Extraction
Venezuela has a lot of resources, so let's talk about what it has going for it. According to the U.S. Energy Information Administration, the country possesses over 303 billion barrels of proven crude oil reserves. That is the biggest hoard in the world, and it accounts up about 17% of the whole thing. It's not surprising that foreign players want it.
Venezuela has a lot of oil, yet it only makes a small amount of the world's oil—less than 1%. How did it get this bad? Corruption, inept management, and strong U.S. sanctions have all come together to stop production. In 1999, they made 3.5 million barrels a day, but currently they only make a little amount of that. The oil is there, buried in the earth, but to make money out of it, the environment needs to be stable, contracts need to be followed, and risks need to be minimal.
In this case, history is quite essential. The government took over most of the oil business in 2007 and drove out huge businesses like ExxonMobil and ConocoPhillips. Hugo Chávez was in charge when this happened. That nationalization scared off foreign investors and set the stage for the downturn we're in now.
Francisco Monaldi, who runs Rice University's Latin American energy program, gets to the heart of the matter: it's not just about fixing up old rigs and pipelines that have rusted. The real issue is persuading foreign companies to put money into the country when the political climate is so shaky.
Global Demand for Heavy Crude and Strategic Implications
There's a strong case for why this is significant around the world on the demand side. Venezuelan heavy crude oil is useful for making diesel fuel, asphalt, and other things that heavy machines and construction need. Because of sanctions on Venezuelan and Russian oil, diesel is hard to find right now all over the world. Lighter crude from the US doesn't function well as a substitute either.
Also, increasing Venezuela's output might undermine Russia's position in a strategic way. People in Europe and other areas have been consuming Russian heavy oil and diesel, but now that the sanctions are in place, they truly need other choices. Flynn thinks that Russia has really benefited from Venezuela's decline since it got rid of a key competitor.
When Trump chatted to reporters on Air Force One last Sunday, he seemed sure. He predicted that "American oil companies would go in and rebuild this system." But the market isn't reacting too strongly yet. There is also a lot of oil in the world right now, which keeps prices stable because there is more than enough.
Legal and Practical Complications Ahead
There's a strong case for why this is significant around the world on the demand side. Venezuelan heavy crude oil is useful for making diesel fuel, asphalt, and other things that heavy machines and construction need. Because of sanctions on Venezuelan and Russian oil, diesel is hard to find right now all over the world. Lighter crude from the US doesn't function well as a substitute either.
Also, increasing Venezuela's output might undermine Russia's position in a strategic way. People in Europe and other areas have been consuming Russian heavy oil and diesel, but now that the sanctions are in place, they truly need other choices. Flynn thinks that Russia has really benefited from Venezuela's decline since it got rid of a key competitor.
When Trump chatted to reporters on Air Force One last Sunday, he seemed sure. He predicted that "American oil companies would go in and rebuild this system." But the market isn't reacting too strongly yet. There is also a lot of oil in the world right now, which keeps prices stable because there is more than enough.
Long Road to Recovery and Uncertain Future
And since we're talking about solutions, the modifications to the infrastructure would be really big. Monaldi thinks that it would take around ten years and $100 billion in investment to increase production from 1 million barrels a day to 4 million barrels a day. That's not a little change. It involves new drilling tools, better refineries, pipelines that don't leak, and workers who know what they're doing.
We will learn a lot in the following few weeks. If things continue the same and U.S. firms start talking about exploratory talks, we might see the first investments in quick fixes, like mending major pipelines or restarting wells that have been sitting empty.
Trump's concept is a risky bet that may disrupt how energy works around the world, compete with Russia, and use up massive supplies. But the problems—political instability, the tremendous costs of reconstruction, legal challenges, and business realities—are very big. It's too early to say if it will work, but it has surely attracted the world's attention.
Benjamin Hayes
Business Journalist
Benjamin Hayes is a seasoned business journalist with a special focus on corporate finance, global markets, and entrepreneurial trends. He has covered major startups, tech investments, and economic shifts in multiple sectors.
