Washington plans to put oil at the heart of Venezuela’s future

Washington plans to put oil at the heart of Venezuela’s future 

Trump administration bets on US energy companies reversing the fall in crude output under Maduro 

An oil tanker is docked close to the El Palito refinery in Puerto Cabello © Jesus Vargas/Getty Images

FT JANUARY 3 2026 

US energy companies will return to Venezuela with “billions of dollars” to invest, said Donald Trump, as he put oil at the heart of his plan for regime change in the resource-rich country.  The president said on Saturday that American drillers — most of which abandoned Venezuela decades ago — would rebuild its oil sector and extract “a tremendous amount of wealth”. “We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” Trump said.  His comments came hours after Washington launched strikes on Caracas and captured President Nicolás Maduro — an audacious move made all the more startling by the US leader’s plain signal that oil was a motive. Other US-backed interventions that deposed leaders in oil-rich states, such as those in Libya, Iraq and Iran, led to years of instability in those countries. 

Venezuela is home to the world’s largest oil reserves. China has been its biggest customer for years, with Russia as a crucial oil partner. Now, according to the US president, Venezuela’s upstream will be an asset for development by American Big Oil. Washington’s latest move will reverberate globally, said analysts. “If we really go in and do some things that are kind of extraordinary: seizures, nationalisations, letting US companies go in and use it as a coercive tool to extract massive rents from the new government — that . . . really would be a game-changer for how the rest of the world views the United States — and US oil companies,” said Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy. Venezuela holds over 300bn barrels of proven oil reserves, even more than Saudi Arabia. It was once a crucial supplier to US Gulf refineries set up to handle the molasses-like heavy oil extracted from the Orinoco region. But widespread corruption, American sanctions and mismanagement sent production sharply lower in recent decades, to just over 900,000 barrels a day — less than a tenth of the US’s own output. Foreign investors fled as Caracas sought more control of its economy’s commanding heights. Trump said the revenues reaped by a revived oil industry would support a new regime in Venezuela — and compensate the Big Oil investors “that were taken advantage of”. Oil industry veterans and their advisers struck a more cautious tone. “American companies, of course, would be tantalised by the opportunity to return to a neighbour with the world’s largest oil reserves,” said Bob McNally, president of Rapidan Energy and a former adviser to George W Bush. “However — there’s a big however — there is history and there is uncertainty and we think they are going to look very carefully before they leap.” Chevron, the only US oil company with a presence in Venezuela, said it would continue to operate in “full compliance with all relevant laws and regulations” but has not commented on expansion plans.  “Chevron remains focused on the safety and wellbeing of our employees, as well as the integrity of our assets,” said a spokesperson. 

The US oil major is well placed to move quickly in Venezuela, where it operates under a special licence from the Trump administration and employs about 3,000 people with its joint venture partners. “The silver bullet for investment for the time being is Chevron because they are already there,” said Ali Moshiri, a former Chevron executive who is currently raising funds to invest in Venezuela’s oil sector. “They have the infrastructure and the people while other companies don’t.” Others were doubtful that investors would rush to the country given decades of instability and the scale of the investment needed in Venezuela’s unconventional heavy oil sector. “The capital we are talking about is massive. Just to maintain production at current levels to 2040 would require about $65bn and northward of $100bn just to get Venezuelan production back to 2mn barrels per day,” said Schreiner Parker, an analyst at energy consultancy Rystad. “This is not something American companies will be running towards just hours after an intervention.” 

Exxon Mobil, the largest US oil company, was among several western groups whose assets were expropriated by Venezuela’s former populist President Hugo Chávez in 2007. It was awarded $1.6bn by an international arbitration panel in 2014 over the nationalisation of its Cerro Negro Project in the Orinoco oil belt.  Last year a World Bank arbitration tribunal dismissed Venezuela’s request to annul a $8.37bn arbitration award to ConocoPhillips over the expropriation of its Hamaca, Petrozuata and Corocoro projects. 

Exxon and Conoco are still seeking payment of most of the compensation awards — a fight that Trump has used to justify his removal of Maduro with repeated references to “stolen oil”. The companies did not respond to requests for comment. 

International oil traders will react to Trump’s move when crude markets open on Sunday — but abundant global supplies have helped free the president’s hands. International benchmark Brent settled just above $60 a barrel on Friday, down from over $120 after Russia invaded Ukraine in 2022. Any disruption to supplies out of Venezuela, which Trump said on Saturday remained under embargo, could push prices higher. But it would take much longer for any extra oil production to be brought on line and volumes could be modest. Analysts said with hefty investment Venezuelan output could potentially double to over 2mn b/d in the coming decade — still less than half Texas’s oil production. “We remain wary of declaring mission accomplished for the Venezuelan oil sector given the decades long decline and still believe that it will be a long road back,” said Helima Croft, a former CIA analyst now at RBC Capital Markets. 

Data visualisation by Clara Murray