The US, Venezuela’s Vast Oil Reserves: Key Questions

After a US military operation that seized Nicolas Maduro, President Donald Trump said he wants to allow American oil companies to head back into Venezuela to tap its massive crude reserves.

Here are some of the key questions around the US interest in Venezuelan oil:

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The country has the largest proven reserves in the world, with 303.221 billion barrels, according to OPEC, of which Venezuela is a member of. That puts it ahead of Saudi Arabia (267.200 billion) and Iran.

But the output is very low. The country pumps around 1 million barrels per day (mb/d), compared with around 3.5 mb/d when Maduro’s predecessor, Hugo Chavez came to power in 1999, according to Peter McNally of global research firm Third Bridge.

“Neglect, poor infrastructure, underinvestment, and corruption have diminished the country’s productive capacity,” he noted.

Sanctions imposed in 2019 by Trump during his first term contributed to production plunging to a historic low of 350,000 b/d the following year.

Due to the curbs, there are few importers of Venezuelan oil. China buys 80 per cent of it, according to estimates, via Malaysia.

Some 5 per cent goes to Cuba under agreements between the two countries.

To get around the embargo, Caracas relies on “ghost tankers” that use numerous ploys, like false flags and fake routes.

The M/T Skipper, intercepted by the US Navy as part of an oil blockade on Venezuela announced last month, was one such “ghost” vessel, transporting over a million barrels of Venezuelan oil, reportedly destined for Cuba.

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A small portion of Venezuelan oil is produced by US group Chevron.

The company operates under a special license issued by Washington that allows it to maintain its partnership with Venezuela’s national oil company and to export part of its production, notably to the American market.

However, it is no longer allowed to transfer money to the state and therefore pays taxes and other dues in crude.

Other US groups present in the early 2000s — ExxonMobil and ConocoPhillips — left the country in 2007, refusing Chavez’s terms.

They required the state to become the majority shareholder of all companies operating in the country.

“We have to be surrounded by safe, secure countries, and we also have to have energy, very important,” Trump said Saturday.

He added “a lot of money is coming out of the ground”, claiming the US would be “repaid for everything” it spent in the country.

The US leader considers that “the oil exported under embargo by Caracas is oil stolen from the international community,” John Plassard of Cite Gestion Private Bank told AFP.

In Trump’s view, these volumes were extracted thanks to American equipment and investments prior to Chavez’s nationalisations, he said.

The US goal is also to push back “Chinese actors from the American continent”, including depriving China of influence over the Panama Canal — through which much of Venezuela’s oil transits — according to Plassard.

“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.

But investing today holds little appeal: oil prices are weighed down by a supply glut and fell in 2025 despite significant growth headwinds like Trump’s tariff war and the ongoing 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.”

In a well-supplied market, analysts say that instability in Venezuela will have a limited effect on the oil price, with only a marginal uptick in prices likely this week.

“Logistics around the ports could be disrupted, flows erratic,” Plassard predicted. He believes the market may be more concerned by Trump’s threats against Iran, which is responsible for far larger oil production.

If Iran “violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue”, Trump posted on his Truth Social platform Friday.

“We are locked and loaded and ready to go,” he added, ahead of a weekend that saw deadly clashes between protesters and security forces there.