Trump wants Venezuela’s oil, but what price will he have to pay and how long will he have to wait to get it?

Although several oil companies, including America’s Chevron, remain active in the country, their activity has declined significantly as Washington expanded sanctions and intercepted crude exports to restrict Maduro’s access to a key economic source.

Sanctions, first imposed in 2015 during President Barack Obama’s administration over alleged human rights abuses, have also left Venezuela unsatisfied with the investment and spare parts needed for this industry.

“The real challenge they face is their infrastructure,” says Callum MacPherson, head of commodity pricing at Investec (an Anglo-South African banking and international asset management firm).

According to the International Energy Agency’s latest report, Venezuela produced about 860,000 barrels per day in November.

That’s barely a third of what it was 10 years ago and accounts for less than 1% of global oil consumption.

The country’s reserves consist of so-called “heavy, sour” oil. It is difficult to refine but useful in producing diesel and asphalt. The United States typically produces the “light, sweet” oil that is ideal for gasoline.

In anticipation of the attacks and Maduro’s capture, the US also seized two oil tankers off the coast of Venezuela and imposed a blockade on the entry and exit of sanctioned tankers from the country.

Homayoun Falakshahi, chief commodity trading analyst at data platform Kpler, says the biggest obstacles for oil companies hoping to exploit Venezuelan reserves are legal and political.

Speaking to the BBC, the analyst said that those who want to drill in Venezuela will have to reach an agreement with the government, which will only be possible once a successor to Maduro is in office.

For Falakshahi, companies would then risk investing billions in the stability of a future Venezuelan government.

“Even if the political situation is stable, it is a process that will take months,” he concluded.

Companies seeking to benefit from Trump’s plan would have to sign contracts with the new government when it takes office before they can begin increasing investment in Venezuela’s infrastructure.

Analysts also warn that it will take tens of billions of dollars – and possibly a decade – to restore Venezuela’s previous output.

Neil Shearing, chief analyst at Capital Economics, said Trump’s plans would have a limited impact on global supply and therefore the price of crude oil.

He said there are “an enormous number of obstacles to overcome and the time frame for what will happen is very long” and that crude oil prices would be little changed in 2026.

Shearing predicted that the companies would not invest until a stable government was installed in Venezuela and that the projects would not produce returns for “many, many years”:

“The problem has always been decades of underinvestment, poor management and high funding costs.”

The analyst added that even if the country returned to previous production levels of about three million barrels per day, it would still remain among the world’s top 10 producers.

In addition, Shearing highlighted the high production of OPEC+ countries and said that the world is currently “not suffering from an oil shortage.”

Former BP (British Petroleum) CEO John Browne told BBC News that revitalizing Venezuela’s oil industry is a “very long-term project.”

“People underestimate how long it takes to get things done. Aligning all resources, especially materials and personnel, takes a long time.”

While there could be a “rapid increase” in some productions, Browne pointed out that volumes could actually fall as the industry reorganizes.

Chevron is the only U.S. producer still operating in Venezuela despite U.S. sanctions, having received an operating license in 2022 under former President Joe Biden.

The company, which is currently responsible for about a fifth of Venezuela’s oil production, reported that it is focused on the safety of its employees and is complying with “all relevant laws and regulations.”

The other major oil companies have remained publicly silent about their plans, and only Chevron has addressed the situation.

But Falakshahi believes oil bosses will talk internally about whether to take advantage of the opportunity.

“The desire to go somewhere depends on two main factors: the political situation and local resources,” he said.

Despite the extremely uncertain political situation, Falakshahi concluded that “the potential gain could be considered too great to avoid.”

John Browne argued that companies want to get involved because “it is a good thing to have business opportunities in different parts of the world.”

“As a business opportunity, if you run a company, you want to get involved very quickly.”

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