Maduro says Trump wants Venezuela’s oil. But is that the real US goal?

Venezuelan President Nicolas Maduro said mounting pressure from the United States is due to one thing: Washington wants to seize the South American country’s vast oil reserves.

The US military this week seized an oil tanker, allegedly carrying Venezuelan oil shipped in violation of US sanctions, and threatened action against other vessels.

The move followed a series of military strikes on Venezuelan boats, which the United States claims are drug smuggling vessels. President Donald Trump called on Maduro to leave office, accusing him of sending drugs and killers to the United States.

So, is Venezuela’s oil what Trump really wants? Would it really be worth it?

It is true that Venezuela, with an estimated 303 billion barrels, is home to the largest proven oil reserves in the world.

But the amount of oil the country actually produces today is small in comparison.

Production has fallen sharply since the early 2000s, as former President Hugo Chavez and then the Maduro administration tightened control of the state-run oil company, leading to the departure of the most experienced staff.

Although some Western oil companies, including US company Chevron, are still active in the country, their operations have been significantly reduced as the United States expands sanctions and targets oil exports, aiming to limit Maduro’s access to a key economic lifeline.

Sanctions — first imposed by the United States in 2015 during President Barack Obama’s administration over alleged human rights abuses — have also largely isolated the country from investment and the parts of it that need it.

“The real challenge they face is their infrastructure,” says Callum McPherson, head of commodities at Investec.

In November, Venezuela produced an estimated 860,000 barrels per day, according to the latest oil market report from the International Energy Agency.

This is barely a third of what it was ten years ago, and represents less than 1% of global oil consumption.

Some in the United States have defended intervention in Venezuela by pointing to opportunities for American companies to revive the oil industry.

“Venezuela, for American oil companies, will be a field day,” said Maria Elvira Salazar, a Republican congresswoman from Florida. He said In a recent interview on Fox Business.

“American companies can come in and repair all oil pipelines, entire oil platforms, and everything related…to oil and its derivatives.”

Trump may seem open to such arguments.

He campaigned under the slogan “Drill, baby, drill” and generally called for expanding oil production, which he linked to lower prices for Americans.

But when it comes to Venezuela, the White House said it is concerned about drug trafficking and what it sees as Maduro’s illegitimacy.

Asked Thursday whether the US campaign in the region was about drugs or oil, White House press secretary Carolyn Leavitt said the administration was focused on “many things.”

She described stopping the flow of illicit drugs into the United States as the “number one” priority.

Clayton Siegel, a senior fellow on energy security at the Center for Strategic and International Studies, says he takes such statements “very seriously.”

He noted the long-standing interest in the region on the part of key players such as Secretary of State Marco Rubio.

“I haven’t seen the supporting evidence that oil is at the center of its ambitions,” he says.

This does not mean that American companies will not be interested.

Currently, Chevron is the only American oil production company still active in Venezuela, after obtaining a license under former President Joe Biden in 2022 to operate, despite US sanctions.

The Trump administration extended another exemption for the company this year, although it canceled exemptions for other companies, such as Spain’s Repsol, in an attempt to limit the flow of money into the Maduro regime.

Today, Chevron accounts for about a fifth of Venezuela’s oil production.

Analysts say Chevron will be among the companies most able to benefit if the United States begins to raise its barriers to dealing with Venezuela.

U.S. refiners, especially those around the Gulf Coast, are also hungry for the “heavier” type of crude oil produced by Venezuela, which tends to be less expensive and therefore more profitable to process.

“It’s been difficult for refiners on the U.S. Gulf Coast in recent years to have Venezuela go under sanctions and cut production, because that means there’s less of this heavy crude available,” says Matt Smith, an oil analyst at Kpler.

“Even if they’re not involved in the production side of things, they’ll be enthusiastic buyers of it.”

While any expansion of oil exports from Venezuela could help lower prices in the United States, analysts say that will take time, as its current production is too limited to have a significant impact.

Restoring Venezuela’s oil industry to its former glory will be a heavy burden.

According to Wood Mackenzie recently a reportImproved management and some modest investments could help boost Venezuela’s oil production to about two million barrels per day over the next two years.

But analysts warned that it would take tens of billions of dollars – and perhaps a decade – to increase production further.

They also said companies could be delayed due to potential complications such as their membership in the Organization of the Petroleum Exporting Countries (OPEC).

Another risk is the outlook for oil demand becoming relatively less important as an energy source, says David Oxley, chief climate and commodities economist at Capital Economics.

He says: “The demand for oil will not fall to the abyss, but it is no longer growing as it was before. We see it as weak and will begin to decline in the late 2030s.”

“Anyone investing in the Venezuelan oil sector has to think, is it worth it?”

Even if Maduro is ousted or US barriers are lifted, Oxley says it’s not clear how much companies will be willing to devote the time and money needed to get Venezuelan oil back online.

“On the oil side, we will need to see lots and lots of investment,” he says. “Certainly in the billions. ‘Drill, baby, drill’ – that’s good, but private companies won’t come in and do it unless it’s profitable.”