Can Venezuela Reclaim Its Oil Crown? Experts Doubt It

Venezuela's bid to reclaim its former oil glory hits a wall of expert skepticism.

The Infrastructure Hurdle

Years of underinvestment and deferred maintenance have left the national oil company's physical assets in a state of decay. Restoring production capacity isn't a simple matter of turning valves; it requires billions in capital and technical expertise that has long since fled the country. The machinery of a once-dominant industry now grinds against the grit of neglect.

The Geopolitical Quagmire

International sanctions and a tangled web of debt obligations further complicate any recovery narrative. Attracting foreign partners—essential for technology and investment—means navigating a political minefield that few major firms are willing to traverse. The financial world watches with the detached cynicism of a bondholder who's already written off the debt, muttering about sunk costs and lost decades.

A Long Road Back

While the resource wealth beneath the ground remains, the pathway to monetizing it is fraught. Rebuilding trust, infrastructure, and market access is a generational challenge, not a quarterly turnaround story. For now, the crown sits tarnished and out of reach—a stark reminder that reserves in the ground mean little without the capital and competence to bring them to market.

In Brief

• Donald Trump aims to revive Venezuela’s oil economy with support from the United States.
• Despite this political will, Wall Street and major American oil groups remain very skeptical.
• Venezuelan oil production is at its lowest, with crumbling infrastructure and congested ports.
• Reviving the sector would require more than 100 billion dollars and at least a decade of efforts.

A Devastated Venezuelan Oil Industry : Between Logistical Chaos and Structural Collapse

While Bitcoin has just surpassed 91,000 dollars after Maduro’s fall, reviving Venezuela’s oil production resembles a total reconstruction operation.

Bloomberg estimates that “rebuilding the country’s oil system could cost more than 100 billion dollars and take at least a decade”. This figure is confirmed by Francisco Monaldi, director of Latin American energy policy at Rice University : “it WOULD take 10 billion dollars per year for ten years just to return to the production levels of the 1970s”. At that time, the country produced nearly 4 million barrels per day, compared to about 1 million today.

The sector’s collapse results from more than a decade of chaotic management under the Maduro regime. The supply chain and critical infrastructure are in an advanced state of decay :

• Congested ports : loading a supertanker now takes 5 days, compared to 1 day previously ;

• Thefts and damage : in the Orinoco basin, rich in nearly 500 billion barrels of recoverable crude, equipment is openly looted and resold as spare parts ;

• Stolen or out-of-service pipelines : some have even been sold as scrap by the state oil company ;

• Uncontrolled spills, fires, and destruction of key facilities hinder any restart attempts ;

• Refineries at a standstill : the Paraguaná complex, the largest in Latin America, operates irregularly and only at low capacity. The four heavy crude processing units are completely shut down.

In this state, the country is unable to process much of the oil it still manages to extract. The conclusion is clear : Venezuela holds the world’s largest reserves but can neither produce nor exploit them without massive structural transformation.

Wall Street and American Majors Keep Their Distance

Faced with this chaotic picture, investors and major oil companies show marked skepticism.

Analysts from RBC Capital Markets, including Helima Croft, warn that any hope for a quick recovery would be illusory : “some will claim this is a Mission Accomplished moment and bet on a quick return to 3 million barrels per day”, they write in their analysis.

For that, a full lifting of sanctions and a smooth political transition would be required, two conditions far from being met to date. Neil Shearing, chief economist at Capital Economics, also tempers enthusiasm: “Venezuela has the largest proven reserves in the world, but that doesn’t mean much. Theory and reality diverge sharply”.

Among the majors, only Chevron continues to operate on site, responsible alone for about 25% of current production, thanks to a special license allowing partial circumvention of U.S. sanctions.

ExxonMobil and ConocoPhillips, two former key players, have stayed away since the seizure of their assets in the 2000s by the Chávez government. Contacted by the media, they chose not to comment on the situation, although Exxon previously stated that a return would only be conceivable under favorable conditions.

In the medium term, projections remain modest. According to Goldman Sachs, if Venezuelan production reached 2 million barrels per day by 2030, it could lower Brent prices by 4 dollars compared to current projections. A notable development, but insufficient to disrupt the global market balance.

In this uncertain context, bitcoin establishes itself as an alternative refuge, far from state logics and geopolitical risks.

Far from unanimous, Trump’s Venezuelan plan triggers distrust and inertia. Kiyosaki denounces a global ploy, seen as an attempt to control resources under the guise of economic revival. Awaiting concrete commitments, markets observe cautiously, while the ground remains fraught with uncertainties.

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