In yesterday’s post, I included the following comment (among others):
Oil is relatively plentiful, given the emergence of EVs. Global demand is down. American oil firms must include this in the calculus of a return to Venezuela. Another consideration: Venezuela’s crude is thick, corrosive, and sour. Extraction requires additional skill, advanced metallurgy, and additional refinement. All are added costs. One begins to wonder if investors will be signing up for negative ROI. 1
Perhaps I was onto something there: Times reporting suggests U.S. oil companies were unprepared for President Trump’s statements about them investing “billions of dollars” in Venezuela.
Oil giants like Exxon Mobil and ConocoPhillips that have deep pockets, vast expertise and, crucially, experience in that country have privately expressed reservations about committing the kind of money it would take to meaningfully boost Venezuelan oil production, according to six people with knowledge of their thinking. 2
Both Exxon Mobil and ConocoPhillips still have lawsuits against Venezuela pending from when Venezuela nationalized their oil industry in 1976. Exxon, Shell, Mobil, and Gulf had invested over $5 BB in their respective operations, and received just over $1 BB in cash and government bonds in exchange. The Times suggests companies like theirs may seek financial guarantees from Venezuela to mitigate some of their risk. 3 , 4
U.S. companies handling domestic refining, by contrast, are well poised to take advantage of surplus crude now bound for our shores.
- Farrell, T. (2026, January 8). US-Venezuela energy Deal: insights and implications. On Current Events. Retrieved January 9, 2026, from https://currentevents.blog/2026/01/08/doe-statement-on-venezuela/ ↩︎
- Elliott, R. F. (2026, January 9). Wary of Investing in Venezuela, Big Oil Heads to the White House. The New York Times. Retrieved January 9, 2026, from https://www.nytimes.com/2026/01/09/business/energy-environment/venezuela-oil-trump.html ↩︎
- Ibid. ↩︎
- Venezuela’s Oil Industry Is Formally Nationalized. (1976, January 2). The New York Times. Retrieved January 9, 2026, from https://www.nytimes.com/1976/01/02/archives/venezuelas-oil-industry-is-formally-nationalized-venezuelan-oil-is.html ↩︎
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