Venezuela’s oil story is back in the foreground after the U.S. moved against Nicolás Maduro and President Trump argued that restarting production could lower oil prices. The backdrop matters: Venezuela once pumped about 3.5 million bpd, but now produces less than 1 million bpd, a collapse tied to nationalizations, sanctions, and deterioration in basic operating capacity, according to a detailed breakdown.
The “why” is not mysterious. Much of the country’s crude is extra heavy. It can be closer to asphalt than conventional oil, which means costly extraction and processing, plus imported diluents and chemicals to keep wells and pipelines flowing. When expertise and investment leave, declines accelerate. The same explainer also notes a major talent drain after PDVSA purged roughly 20,000 workers, about 40% of its personnel, hollowing out the technical bench.
- Scale is not the constraint. Proven reserves are about 303 billion barrels, roughly 17% of the world total, as cited in the AP-syndicated report.
- Capital and stability are. Analysts cited by Investopedia put rebuilding needs around $80B–$100B over roughly a decade, and that assumes political stability.
Next steps hinge on “how” the U.S. tries to operationalize control: sanctions waivers, contract protections, and payment mechanisms for exports. There’s also the legal overhang of who has the right to sell the oil and sign long-term agreements, a risk that could deter public-company boards even if barrels look profitable on paper.
For decision-makers, treat Venezuela as a multi-year optionality story with real tail risk. The near-term macro effect is limited. The bigger question is whether policy choices reduce enough uncertainty to unlock sustained investment without triggering legal, environmental, or geopolitical backlash.
