Photo: Andrey Rudakov/Bloomberg via Getty Images
Following a three-week U.S. naval quarantine that has halted most of Venezuela’s oil exports, the Trump administration apprehended Nicolás Maduro and his wife, Cilia Flores, and declared that the United States is now running Venezuela. President Trump said that U.S. oil companies would invest billions of dollars to rejuvenate Venezuela’s dilapidated oil industry, with proceeds used to pay back those investments, reimburse prior American claims, and support the people of Venezuela.
This commentary analyzes President Trump’s stated vision for Venezuela’s oil industry, describing the resources and conditions needed to secure U.S. company participation in rehabilitating the sector and associated costs and timelines. A forthcoming paper will address the wider geostrategic effects of Trump’s policies as energy consumers and producers react and adjust to rapidly changing circumstances.
Venezuela possesses the largest oil resources in the world, estimated at more than 300 billion barrels. At its highest point, Venezuela produced close to 3.5 million barrels per day (mb/d). Production steadily declined due to severe mismanagement under the leadership of former Venezuelan President Hugo Chávez, and it has continued its downward trajectory in recent years under pressure from U.S. sanctions, bottoming out at just 500 thousand barrels per day (kb/d) during the first Trump administration. Since summer 2025, output has hovered around 900 kb/d (see Figure 1).
Most Venezuelan oil is “extra heavy,” meaning it is extremely viscous and carbon rich compared to lighter oil grades, such as U.S. West Texas Intermediate. It requires special preprocessing (called upgrading) prior to refining into transportation fuels like gasoline, diesel, and jet fuel—and that added processing requires costly, capital-intensive infrastructure.
Hypothetically, under optimal legal, fiscal, and physical operating conditions, it should be possible for Venezuela to reattain its historical high-water mark of oil production above 3 mb/d. But its oil industry requires a range of repairs and investments to come back online, including the following:
Adding incremental tranches of Venezuelan oil production can be split into two categories: easy/short-term and challenging/protracted. For example, one “low-hanging fruit” initiative to increase output would involve an extensive program of “workovers” (major maintenance and repairs) on existing oil wells. This would require the deployment of at least a few dozen drilling rigs from outside Venezuela, access to specialized materials (many of which will be more expensive starting this year because of Trump’s tariffs), and oilfield services specialists from countries like the United States. Such a workover program might increase output by approximately 500 kb/d (or 50 percent of current output) within 18 months of its initiation, at a cost of “only” a few billion dollars.
On the other hand, building and refurbishing upgrading units are on the other side of the cost and complexity spectrum—with a price tag of tens of billions of dollars and requiring at least several years for unit renovations, and perhaps six or more years for new builds. This longer timeline will be needed to grow Venezuela’s sustainable production capacity materially above 2 mb/d.
One of the most important requirements on every energy company’s checklist for doing business around the world is the outlook for political stability in the host country. That’s especially true in a case like Venezuela, with its history of socialist, autocratic rule; stolen elections; alliances with U.S. adversaries; macroeconomic failures; and oil industry expropriations driven by resource nationalism.
It doesn’t matter how much oil is underground and technically accessible if drillers and producers believe that the risks outweigh potential rewards in a host country. While President Trump aspires for U.S. energy companies to invest heavily in Venezuela’s energy sector, a credible road map to political stability is the chief prerequisite.
And there’s good reason to doubt the outlook for political stability in Caracas, as governance and transition plans are ambiguous at best.
Although Maduro himself is out of the picture, Trump has signaled his expectation that the Maduro regime will cooperate with the administration. Asked whether the United States would work with Venezuelan interim president and Maduro regime leader Delcy Rodríguez, Trump said Rodríguez is “essentially willing to do what we think is necessary to make Venezuela great again.” And Trump senior adviser Stephen Miller told CNN that the Venezuelan “government has sent . . . message after message making clear that they will meet the terms, demands, conditions, and requirements of the United States.”
Trump’s approach to working with Venezuela’s current leadership is difficult to reconcile with the administration’s longstanding accusation of its illegitimacy, recognizing that Maduro and his associates fraudulently retained power despite the political opposition’s landslide victory in the July 2024 election.
Trump is apparently hoping that the very same regime, now headed by Delcy Rodríguez, will change its behaviors by halting drug activity, ending cooperation with U.S. adversaries, and welcoming U.S. oil companies back into the country under favorable fiscal terms. Trump is therefore not seeking to oust the Venezuelan political leadership, but to transform it into a partner of the United States.
As of now, there’s no indication that this approach is likely to succeed in attracting international energy corporations into Venezuela’s oil sector. Unless and until those companies are confident of a stable political future in Venezuela—one that will last a lot longer than Trump’s term—they’re unlikely to make the tremendous investments that would be needed to restore and grow Venezuela’s capacity to produce oil and gas.
Perhaps mindful that far more pressure will be needed to obtain the Maduro-Rodríguez regime’s cooperation, Trump is for now maintaining the naval quarantine blocking most of Venezuela’s oil exports and leaving the massive U.S. military force nearby and at the ready for additional missions.
Considering Trump’s expectation that U.S. oil companies will enthusiastically enter the Venezuelan oil sector, there’s a lesson to be learned from the administration’s first-year assumption that policy changes would incentivize large increases in domestic energy supply. Neither early rhetoric like “drill baby, drill” and “unleashing” American energy supplies, nor modest policy changes like new lease sales, have pushed U.S. oil output significantly higher; meanwhile, output is forecasted to decline during Trump’s second year in office. Companies ran the numbers and determined that major new oil production with prices near or below $60 would not be profitable—an unacceptable outcome for their investors.
Likewise, energy companies will evaluate opportunities in Venezuela with a similar litmus test—do the benefits of committing to multi-decade and multi-billion-dollar investments outweigh the risks? Even if the answer is yes—and we’re far from reaching that answer after last weekend’s dramatic events—policymakers should set realistic expectations for the long timetables associated with those results.
Clayton Seigle is a senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies and holds the James R. Schlesinger Chair in Energy and Geopolitics.