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Following a US military operation that resulted in the capture of Nicolas Maduro, President Donald Trump said Washington wants to permit American oil companies to re-enter Venezuela and exploit its enormous crude oil resources.
Below are the main questions surrounding US interest in Venezuelan oil:
How large are Venezuela’s oil reserves?
Venezuela holds the world’s largest proven oil reserves, estimated at 303.221 billion barrels, according to OPEC, of which it is a member.
This places it ahead of Saudi Arabia, with 267.200 billion barrels, and Iran.
Despite this, production remains severely depressed. Venezuela currently produces about 1 million barrels per day (mb/d), down from roughly 3.5 mb/d when Hugo Chavez, Maduro’s predecessor, assumed power in 1999, according to Peter McNally of global research firm Third Bridge.
“Neglect, poor infrastructure, under investment, and corruption have diminished the country’s productive capacity,” he said.
US sanctions imposed in 2019 during Trump’s first term further exacerbated the decline, pushing output to a historic low of 350,000 barrels per day the following year.
How does Venezuela bypass sanctions?
Because of international restrictions, there are very few buyers of Venezuelan crude. China accounts for about 80 per cent of purchases, according to estimates, with shipments routed through Malaysia.
Around 5 per cent of exports go to Cuba under bilateral agreements.
To evade sanctions, Caracas depends on so-called “ghost tankers” that employ tactics such as fake flags, altered tracking data, and misleading shipping routes.
One such vessel, the M/T Skipper, was intercepted by the US Navy as part of an oil blockade on Venezuela announced last month. The tanker was carrying more than one million barrels of Venezuelan oil reportedly headed for Cuba.
To avoid US penalties, buyers make payments using cryptocurrency, including asset-backed stablecoins, primarily USDT.
What is the US presence in Venezuela’s oil sector?
A limited share of Venezuelan oil output is produced by US energy giant Chevron.
Chevron operates under a special licence from Washington that allows it to continue its partnership with Venezuela’s state-owned oil company and export some of its production, particularly to the US market.
However, the firm is barred from transferring cash to the Venezuelan state and instead settles taxes and other obligations through crude oil shipments.
Other major US companies active in the early 2000s, including ExxonMobil and ConocoPhillips, exited Venezuela in 2007 after rejecting conditions imposed by Chavez.
Those terms required the state to hold a majority stake in all oil ventures operating in the country.
Why is Trump focused on Venezuelan oil?
“We have to be surrounded by safe, secure countries, and we also have to have energy, very important,” Trump said on Saturday.
He added that “a lot of money is coming out of the ground,” asserting that the US would be “repaid for everything” it spent in Venezuela.
Trump believes that “the oil exported under embargo by Caracas is oil stolen from the international community,” John Plassard of Cite Gestion Private Bank told AFP.
According to Plassard, Trump argues that much of this oil was extracted using American equipment and investments made before Chavez’s nationalisations.
Washington’s broader objective is also to push back “Chinese actors from the American continent,” including limiting China’s influence over the Panama Canal, through which a significant portion of Venezuelan oil is transported, Plassard said.
Is Trump’s plan feasible?
“Any recovery in production would require substantial investment given the crumbling infrastructure resulting from years of mismanagement and underinvestment,” Giovanni Staunovo of UBS told AFP.
Yet current conditions make such investments unattractive. Oil prices are under pressure from excess supply and declined in 2025 despite major headwinds such as Trump’s tariff war and the continuing conflict in Ukraine.
“The US oil majors main responsibility is towards their shareholders, not the government,” Ole Hansen, an analyst at Saxo Bank, told AFP.
“With that in mind I doubt we will see a rush of interest to get back into Venezuela anytime soon.”
What could this mean for oil prices?
With global markets already well supplied, analysts suggest that turmoil in Venezuela is unlikely to have a major impact on oil prices, with only a modest increase expected this week.
“Logistics around the ports could be disrupted, flows erratic,” Plassard said. He added that markets may be more concerned about Trump’s threats toward Iran, which produces far more oil.
“If Iran ‘violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue’,” Trump wrote on his Truth Social platform on Friday.
“We are locked and loaded and ready to go,” he added, ahead of a weekend marked by deadly clashes between protesters and security forces in Iran.
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With inputs from AFP
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