Trump Bets on Reviving Venezuela’s Oil Industry – Markets Skeptical, U.S. Oil Stocks Slip

As Donald Trump unveils his ambitious plan to revive Venezuela’s oil sector with U.S. support, investors and energy executives are pouring cold water on the idea. Wall Street is signaling clear skepticism: a quick rebound is unrealistic, and the risks—both political and financial—are immense. News of potential recovery triggered a selloff in major U.S. energy stocks, while analysts warned that logistical breakdowns and decades of mismanagement in Venezuela’s oil sector could stall any real progress for years to come.

$100 Billion Needed – and a Decade of Work Ahead According to Bloomberg, restoring Venezuela’s oil infrastructure would require over $100 billion in investment and at least ten years of rebuilding—and that’s the optimistic scenario. Francisco Monaldi, energy policy director for Latin America at Rice University’s Baker Institute, said that bringing production back to 1970s levels—nearly 4 million barrels per day—would demand $10 billion in annual capital for a decade. “A faster recovery would require even more aggressive spending,” he added. Venezuela is currently producing only around 1 million barrels per day, despite having the largest proven oil reserves in the world.

Infrastructure Collapse: Ports, Pipelines, and Refineries in Ruin Following years of economic decline under Nicolás Maduro—who was captured by U.S. forces last weekend—the oil infrastructure lies in disarray: 🔹 Port operations are sluggish – supertanker loading takes up to 5 days, versus 1 day seven years ago

🔹 Oil platforms are abandoned – some are stripped for parts in broad daylight

🔹 Pipelines are corroding and leaking, some reportedly dismantled and sold as scrap by the state oil company

🔹 The once-mighty Paraguana refining complex now runs intermittently at minimal capacity; some units are completely offline The country can’t even refine what little oil it still extracts, as key facilities are non-functional or obsolete.

Wall Street Says: Don’t Buy the Hype Analysts at RBC Capital Markets, including Helima Croft, warned that hopes for a quick output boom are wishful thinking. “Some will treat this like a ‘mission accomplished’ moment,” they wrote, “but reaching 3 million barrels per day is highly unlikely anytime soon—even if sanctions are lifted and political power transitions smoothly.” Neil Shearing, chief economist at Capital Economics, added that having the world’s largest reserves means little without the capacity to exploit them. Even if Venezuela achieved 3 million barrels per day, he noted, it would only add about 2% to global supply.

Oil Prices React—But Gains Will Be Limited Goldman Sachs analysts suggest Venezuela’s situation could shift Brent crude prices by about $2 per barrel in either direction. If production increases, prices may ease. If output falters, prices could rise. Their long-term model shows that if Venezuela reaches 2 million barrels per day by 2030, it could lead to a $4-per-barrel decline in Brent prices compared to current projections.

Chevron Holds On—Exxon and Conoco Stay Away Chevron remains the only major U.S. oil company currently operating in Venezuela. It accounts for roughly 25% of the country’s current output, under a special license allowing it to bypass certain U.S. sanctions. ExxonMobil and ConocoPhillips, both of which had assets expropriated in the early 2000s under Hugo Chávez, are still absent. Exxon has stated it will only consider returning if conditions change significantly. Chevron, meanwhile, remains cautious: “We continue to prioritize the safety of our people and the protection of our assets in Venezuela, operating in full compliance with all applicable laws and regulations,” the company said.

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