President Donald Trump is betting that capturing President Nicolás Maduro and opening Venezuela’s oil sector to major US producers can convert the world’s largest reserves into fast barrels and faster cash, but the math points to slow, risky, and potentially uneconomic output growth.
Trump framed the push as both a repair job and payday, saying US oil companies would “spend billions of dollars to fix badly broken infrastructure” and “start making money for the country,” after years in which Venezuela’s oil “has been a bust.”
Under former leader Hugo Chávez, Venezuela nationalized assets held by American and other Western firms, and claims totaling about $60 billion have been filed against Venezuela and state producer PDVSA in US and international tribunals.
The raids follow Trump demanding that Venezuela return “all of the oil, land and other assets that they previously stole from us.”
After decades of underinvestment and mismanagement, Venezuela’s oil output is down about two-thirds from the late 2000s to roughly 1.0 million barrels per day, despite estimated reserves of about 300 billion barrels, or roughly one-fifth of global reserves.
In the immediate window, output is more likely to fall than rebound. After the US declared a blockade in December targeting shipments on blacklisted tankers and seized at least one vessel, exports “cratered” and floating storage on idle tankers hit multi-year highs.
Venezuela is also short of naphtha, the diluent needed to move its very heavy crude, and volumes from Russia are no longer coming through. Without relief, production could be forced below 700,000 bpd.
If there is a smooth political transition and US sanctions and the blockade are lifted, basic maintenance could lift output to about 1.2 million bpd by end-2026. That would still be below Venezuela’s maximum potential and would leave it only slightly behind Libya, the world’s 18th-largest producer.
Rystad Energy estimates about $110 billion of upstream capex would be required to restore output to where it was 15 years ago, about twice what US oil majors invested worldwide in 2024. Chevron, already exporting about 300,000 bpd to the US under a sanctions waiver, could expand, but other majors have not publicly signed on, and financiers and insurers would likely move slower still.
Venezuela’s industry has suffered a major brain drain, with tens of thousands of skilled workers leaving, while PDVSA, at about 70,000 employees, is now largely run by the armed forces and would need wholesale reform to support viable Western joint ventures.
Even if capital and labor problems ease, pricing may not cooperate. The International Energy Agency expects global crude supply to exceed demand until at least the end of the decade, and analysts see oil drifting toward $50 per barrel, potentially below, in 2026 and 2027, which would sit under breakeven for many Venezuelan fields and make new projects even less competitive. 
In Kpler’s most optimistic scenario, Venezuela could reach 1.7 to 1.8 million bpd by 2028, reshaping flows as US refiners chase heavy, sour barrels and Cuba looks elsewhere, while China’s teapot refineries risk being cut out.
A return to 2.5 to 3.0 million bpd looks like a long-duration project, meaning Trump’s military speed does not translate into economic speed.
Information for this briefing was found via The Economist and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
