The country’s claimed crude oil reserves are the largest in the world, according to OPEC data, standing at just over 300 billion barrels, compared to around 45 billion in the United States and 267 billion in Saudi Arabia.
But having reserves and exploiting them are very different things. Before oil producers can start pumping, both the Venezuelan government and the U.S. oil companies will have to traverse several geopolitical and financial steps. Some of these could take weeks; others may take years. The entire process will cost tens of billions of dollars, if not more, at a time when oil prices are low. And American oil companies may well be leery about investing in a country with a long history of instability when it comes to foreign investment.
Venezuela produced over 3 million barrels per day though the 1960s until the late 1990s. Then came nationalization, decades of underinvestment, and harsh sanctions imposed in Trump’s first term to pressure the Maduro government, and most recently, a U.S. naval blockade imposed in December. As of last year, production had fallen to around a million barrels per day.
About 120,000 barrels per day winds up at U.S. Gulf Coast refineries built to process its heavy sour crude, courtesy of a rare license to operate granted to Chevron. (Chevron shares were up in early trading Monday morning.) But “for the most part, the Venezuela oil story has been a small amount of production all going to China,” Greg Brew, an analyst at the Eurasia Group, told me.
To get a sense of where Venezuela’s oil production capacity sits in the international context, Texas alone has produced more oil every year since 2018 than Venezuela’s all-time peak production of 3.7 million barrels per day in 1970. Canada, which produces a comparably heavy and sour crude, produced over 5 million barrels per day in 2025.
The immediate question is whether the United States will lift its blockade and allow oil to flow more freely. Venezuela’s monthly exports dropped dramatically in December to 19 million barrels, down from 27 million the month before, according to S&P Global Commodities data.
“If that happens,” oil analyst Rory Johnston told me about the potential to lift the blockade, “those barrels will still largely go to China.”
But even that is in question.
When asked on Face the Nation how the United States would “run” Venezuela, as Trump indicated, without an active military presence in the country, Secretary of State Marco Rubio indicated that the blockade would be a key pressure point. “That’s the sort of control the president is pointing to,” he said. The blockade “remains in place,” Rubio added, “and that’s a tremendous amount of leverage that will continue to be in place until we see changes.”
Even if the blockade were lifted, the next question over the medium to long term would be the lifting of U.S. sanctions, which have been in effect on Venezuela’s oil industry in their harshest form since 2019. With very few exceptions, these have prevented U.S. and other large oil companies from getting further involved with the country.
Sanctions are “why American companies either can’t or won’t buy Venezuela oil, and that keeps other buyers from not buying it as well,” Brew told me. “That’s another source of downward pressure on Venezuela oil exports.”
Even after it’s no longer literally illegal to work with Venezuela, however, there’s still the logistical and financial questions of long-term investments in Venezuela’s oil sector.
Venezuela would have to repair its connections to the international financial system, which have been strained by its defaults on tens of billions of debt. It would also likely have to overhaul its own laws around foreign investment in its oil industry that favor its state oil company PDVSA, according to Luisa Palacios, a former chairperson of Citgo, the (for now) majority-Venezuelan-owned energy company. Only then would U.S. oil companies likely have a plausible case to re-invest.
The next question is whether that investment would be worth it.
“Foreign companies are looking for an improvement in governance, the restoration of the rule of law, and an easing of U.S. oil sanctions,” Palacios wrote in a blog post for the Columbia Center on Global Energy Policy. “If the Venezuelan government were to commit to these reforms in a serious way (and the United States was therefore prepared to remove sanctions), an increase in oil production of 500,000 b/d-1 million b/d within a 2-year horizon, while optimistic, seems plausible” — though nowhere near the country’s 3.7 million-barrel peak.
Jefferies analyst Alejando Anibal Demichelis came to a similar conclusion in a note to clients, adding that “further increases beyond that level could be much more complex and costly.”
To get from here to there would require extensive investment in an environment where oil is plentiful and cheap. Oil prices saw their largest one-year decline last year since the onset of COVID in 2020.
“This is a moment where there’s oversupply,” Johnston told me. “Prices are down. It’s not the moment that you’re like, I’m going to go on a lark and invest in Venezuela.”
Venezuela will need that confidence to generate the necessary investments. The country’s oil industry “desperately needs more operational and financial support,” according to analysts at the consultancy Wood Mackenzie, which has estimated that it would require some $15 billion to $20 billion of investment over a decade to get production from existing operations to increase by 500,000 barrels per day.
Within six months to a year, Brew told me, “the volume of exports that could realistically be expected to increase is 200,000 to 400,000 barrels a day.” And that figure assumes “the stars align” in terms of the blockade, sanctions relief, and investment.
The “best case scenario,” Brew told me, is that tens of billions of dollars of U.S. investment flows into Venezuela as the blockade is lifted, sanctions are removed, and Venezuela reforms its laws to allow more foreign investment.
“Even there, I think realistically, it takes two years to get production from 1 million to 2 million barrels a day, and it costs a lot of money in a period amidst price conditions that are expected to be fairly soft,” he said.
As a rough guideline for what’s feasible over the long term, Iraq’s oil production rose from about 2 million barrels per day in 2002 to 4.7 million barrels by the end of the next decade, according to Wood Mackenzie. But that was at a time when oil prices were generally rising.
In any case, more oil is more oil, and it’s hard to see how Venezuela’s exports could get much lower. Industry analysts largely concluded that the operation to remove Maduro and put the United States in the driver’s seat would exert at least a mild downward pressure on oil prices.
But do major American oil companies want to get involved in the first place? “We’ve been expropriated from Venezuela two different times,” ExxonMobil chief executive Darren Woods told Bloomberg last year. Both Exxon and ConocoPhillips left the country in 2007 rather than accept new contracts with Venezuela’s state-owned oil company.
Brew is pessimistic. “I don’t see much of an upside in the short term,” he told me. That’s because the potential profits from reinvesting could be meager. When Maduro came to power in 2013, U.S. oil prices were over $90 a barrel, compared to around $60 today.
“But apart from commercial incentives, there is the incentive of, Okay the president wants us to do this. We can do it,” Brew said, but he cautioned, “I don’t think he’s in a position to leverage major US oil companies to go into Venezuela, simply by his own personal inclinations,” Brew said. “They’re going to need to see it make commercial sense. And right now it simply doesn’t.”
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