While Donald Trump promises to revive the Venezuelan economy through a strong comeback of its oil industry, major players in the American oil sector remain skeptical. Behind the stated ambition, the facts are implacable: crumbling infrastructure, political instability and widespread mistrust in the markets. Both Wall Street and the oil majors see this project as a high-risk bet, with colossal costs and no guarantee of success. Venezuela's rebound under Trump may well remain an illusion.
In brief
- Donald Trump aims to revive Venezuela's oil economy with the support of the United States.
- Despite this political will, Wall Street and the major American oil groups are very skeptical.
- Venezuelan oil production is at an all-time low, with infrastructure in ruins and ports clogged.
- Turning the sector around would require more than $100 billion and at least a decade of effort.
Venezuela's oil industry devastated: between logistical chaos and structural collapse
While bitcoin has just crossed $91,000 after the fall of Maduro, relaunching Venezuela's oil production is akin to a total reconstruction operation.
Bloomberg estimated that “rebuilding the country’s oil system could cost more than $100 billion and take at least a decade”. A figure confirmed by Francisco Monaldi, director of Latin American energy policy at Rice University: “It would take $10 billion a year for ten years just to return to 1970s production levels”. At that time, the country produced almost 4 million barrels per day, compared to around 1 million today.
The sector's collapse is the result of more than a decade of chaotic management under the Maduro regime. The supply chain and critical infrastructure are in a state of advanced ruin:
- Congested ports: loading a supertanker today takes 5 days, compared to 1 day previously;
- Theft and damage: in the Orinoco basin, rich in nearly 500 billion barrels of recoverable crude, equipment is looted in the open and resold in spare parts;
- Pipelines stolen or out of service: some were even resold as scrap metal by the state oil company;
- Uncontrolled spill, fires and destruction of key installations hamper any attempt at restart;
- Refineries at a standstill: the Paraguaná complex, the largest in Latin America, is operating irregularly and only at low capacity. The four heavy crude processing units are at a complete standstill.
In this state, the country is unable to process much of the oil it still manages to extract. The observation is clear: Venezuela holds the largest reserves in the world, but it can neither produce nor exploit them without a massive structural transformation.
Wall Street and the American majors remain at a distance
Faced with this chaotic picture, investors and major oil companies are showing marked skepticism.
RBC Capital Markets analysts, including Helima Croft, warn that any hope of a rapid recovery would be illusory: “some will claim that this is a Mission Accomplished moment and bet on a rapid return to 3 million barrels per day”we can read in their analysis.
For this to happen, we would still need a complete lifting of sanctions and a smooth political transition, two conditions far from being met to date. Neil Shearing, chief economist at Capital Economics, also tempers the enthusiasm: “Venezuela has the largest proven reserves in the world, but that doesn't mean much. Theory and reality diverge sharply ».
As for the majors, only Chevron continues to operate there, responsible for around 25% of current production, thanks to a special license allowing it to partially circumvent American sanctions.
ExxonMobil and ConocoPhillips, two former key players, have remained on the sidelines since the seizure of their assets in the 2000s by the Chávez government. Asked by the media, they did not wish to comment on the situation, although Exxon had previously stated that a return would only be possible in the event of favorable conditions.
In the medium term, projections remain modest. According to Goldman Sachs, if Venezuelan production reaches 2 million barrels per day by 2030, it could lower the price of Brent by $4 compared to current projections. A development that is certainly notable, but insufficient to upset the balance of the world market.
In this uncertain context, bitcoin stands out as an alternative refuge, far from state logic and geopolitical risks.
Far from being unanimous, Trump's Venezuelan plan triggers distrust and inertia. Kiyosaki denounces a global maneuver, seen as an attempt to control resources under the guise of economic recovery. While waiting for concrete commitments, the markets are observing, cautiously, while the field remains undermined by uncertainties.
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