President Donald Trump’s push to reopen Venezuela to U.S. oil interests is colliding with a brutal constraint. The world is already awash in crude, and Venezuela’s heavy sour oil is expensive and emissions-intensive to produce. That combination makes large-scale investment hard to justify without major political stabilization and likely financial incentives.
As described in reporting on Venezuela’s reserves, global crude is a little over $60 per barrel, while some estimates put Venezuela project breakevens closer to $80. Analysts cited oversupply of roughly 2M barrels per day, about twice Venezuela’s current output, which is under 1M barrels per day. Even if geology is generous, the near-term economics are not.
The climate math is worse. CNN notes Venezuela holds more than 300B barrels of reserves, but much of it is heavy, viscous crude that requires more energy to extract and refine. The International Energy Agency estimates Venezuela’s methane intensity is 6x the global average, and one cited estimate puts emissions per barrel at more than 2x the global average. Old infrastructure also raises spill and flaring risk, which can quickly become a reputational and regulatory issue for any partner.
There is a strategic temptation. U.S. Gulf Coast refineries are well suited for heavy crude, and reclaiming supply could reshape regional flows. But the “how” is daunting. Rystad estimates a rebuild to 1990s-era production would require around $183B over more than a decade, far beyond what companies typically commit without stable contracts and price support. That’s a sharp turn from the shale era’s drill-first mindset.
If you operate in energy, treat Venezuela as a long-dated option, not a near-term supply shock. Watch for concrete contract terms, sanctions policy changes, and any sign of price floors or subsidies that could make the math work.
