Develop Venezuela’s “world’s largest oil reserves”? Trump’s “ambitions are lofty,” but “reality is harsh.”

The United States’ “blitz” operation against Venezuela has not only altered the country’s political landscape, but also pushed the energy fate of the world’s largest oil reserves nation into the spotlight. Although U.S. President Trump claimed that the revival of Venezuela’s oil industry would be led by major American oil companies, the industry generally believes that, given severe infrastructure collapse, legal risks, and political uncertainties, restoring the country’s oil output will be a long and arduous process.

According to reports by Xinhua News Agency and CCTV News, Trump confirmed that the U.S. has captured Venezuelan President Maduro through military action and announced the U.S. will “manage” Venezuela until a “safe” transition takes place. Trump particularly emphasized that major U.S. oil companies would invest billions of dollars to repair the country’s severely deteriorated oil infrastructure. Venezuelan opposition leader Maria Machado responded, declaring that “national sovereignty” has arrived and they are prepared to take power.

Although dramatic geopolitical changes have drawn attention, their immediate impact on the global crude oil market is relatively limited. Data shows that while Venezuela boasts 303 billion barrels in oil reserves, its current daily production is only about one million barrels, approximately 1% of global output. Analysts point out that since the global market is currently in excess supply and Venezuela’s production recovery will take time, oil prices are unlikely to spike out of control in the short term.

However, regarding Trump’s ambitious energy plans, Reuters cites several industry experts who indicate that even if the regime changes, restoring Venezuela’s oil industry is far from a one-day feat. From long-term investment shortages to complex debt disputes, American oil giants returning to Venezuela face “harsh” realistic challenges.

Hard-to-Cross Output Gap

Despite Trump’s promise that American enterprises will quickly intervene, Reuters analysis notes that even if billions of dollars are invested, Venezuela’s oil output will struggle to see substantive increases in the coming years.

As a founding member of OPEC, Venezuela’s daily output in the 1970s reached 3.5 million barrels, accounting for more than 7% of global production at that time. However, since 1999, due to poor management, lack of investment, and international sanctions, the country’s energy infrastructure has severely degraded. Its current daily output has dropped to about one million barrels, most of which is costly to process and environmentally problematic extra-heavy crude oil.

Francisco Monaldi, director of Rice University’s Latin American Energy Program at the Baker Institute, pointed out that, in addition to insufficient drilling, frequent blackouts and equipment theft pose huge physical barriers to restoring output. Energy strategist Thomas O’Donnell told Reuters that, if the political transition goes smoothly, it may take five to seven years for infrastructure repairs and investments to bring about significant output increases.

Prerequisites for the Giants’ Return

For American oil giants such as ExxonMobil and ConocoPhillips, which used to have assets in Venezuela, the conditions for returning to the country’s market are extremely demanding. According to Reuters, analysts widely believe that unless payment guarantees, minimum security assurances, and official lifting of U.S. sanctions are in place, American companies will not act rashly.

Historical legacy issues are also a major obstacle. Venezuela nationalized its oil business in the 2000s, prompting foreign capital, including ExxonMobil and ConocoPhillips, to withdraw and launch arbitration. Currently, Chevron is the only American major oil company still operating in Venezuela.

Francisco Monaldi analyzed that ConocoPhillips might be one of the companies most willing to return since Venezuela owes it over $10 billion, and returning may be the only way to recover its debt. In response to Reuters’ inquiry, the company’s spokesperson said they are monitoring the situation but did not disclose specific investment intentions. Mark Christian, director of business development at CHRIS Well Consulting, emphasized that Venezuela must reform its laws to allow foreign oil companies to make larger-scale investments.

Political Vacuum and Security Risks

Beyond commercial considerations, geopolitical uncertainty is a key factor deterring investment. Brian Fonseca, director of the Jack D. Gordon Public Policy Institute, warned that the next 48 hours are critical; toppling Maduro does not automatically dismantle his power structure—the country faces risks of civil war or internal conflict.

Phil Flynn, senior market analyst at Price Futures Group, pointed out that if Venezuela’s military supports the opposition, it will be positive for the market; otherwise, if the situation descends into conflict, the market response will be drastically different. In addition, Ed Hirs, an energy researcher at the University of Houston, cautioned that looking back in history, regime changes in Iraq and Libya did not bring notable oil benefits to U.S. companies, and he fears this history may repeat in Venezuela.

Currently, Chevron says it remains focused on employee safety and asset integrity and will continue to comply with all laws and regulations. Until the situation becomes clearer, other international capital is expected to remain on the sidelines.

Market Reaction: Oil and Gold Prices

Since the market has expected oversupply, the direct shock of this incident on commodity prices is limited. This year, oil prices have been suppressed by weak demand and increased supply expectations from OPEC+. Phil Flynn stated that while there may be a short-term psychological boost, Venezuela’s current oil supplies can easily be replaced by other global producers.

As for precious metals, Venezuela’s gold output accounts for a small share globally. Analysts believe that unless the U.S. increases its military involvement and Venezuela mounts a tough counterattack leading to an escalation, the event’s short-term support for gold prices will be limited.

Overall, although Trump is attempting to “manage” Venezuela and restart its vast oil machinery, faced with broken infrastructure, complicated legal disputes, and an extremely unstable political environment, this vision is unlikely to translate into actual output in the short term.

Risk warning and disclaimerThe market carries risks, and investments should be made cautiously. This article does not constitute personal investment advice and does not consider the specific investment goals, financial status, or needs of individual users. Users should assess whether the opinions, views, or conclusions herein suit their own circumstances. Investment is made at one’s own risk.