Recent developments have escalated tensions between the United States and Venezuela, particularly regarding the South American nation’s oil industry. The U.S. seized an oil tanker off Venezuela’s coast, a move reflecting Washington’s intensified efforts to exert influence in Latin America under the new administration. This incident underscores the complex relationship between geopolitics and Venezuela’s oil sector, which has faced significant challenges in recent years.
U.S. sanctions on Venezuelan oil were imposed in 2015, leading to a dramatic decline in the country’s crude production. Despite possessing the largest oil reserves in the world, Venezuela currently supplies only 1 percent of global oil. According to the U.S. Energy Information Administration, the country holds approximately 17 percent of global oil reserves, totaling over 300 billion barrels. In the mid-1990s, Venezuela was responsible for around 5 percent of the world’s crude output. However, years of mismanagement, underinvestment, and the impact of U.S. sanctions have diminished its production capabilities.
With the ongoing sanctions, most of Venezuela’s crude is exported to China, utilizing shadow fleets to evade restrictions. The Trump administration’s military presence in the region has raised concerns about potential land attacks and further escalations. Since early September, the U.S. military has conducted 22 strikes in the Caribbean Sea and eastern Pacific Ocean, reportedly resulting in at least 87 fatalities. President Trump has characterized these actions as efforts to combat drug trafficking, further complicating the narrative surrounding Venezuela’s oil.
Nicolás Maduro, Venezuela’s president, has publicly criticized the U.S. military actions, asserting that the underlying motive is control over oil resources. Colombian President Gustavo Petro echoed this sentiment, suggesting that the campaign against Caracas is fundamentally about oil rather than democracy or drug trafficking. Trump’s administration has been vocal in its desire for regime change in Venezuela, having issued an ultimatum for Maduro to step down. Reports indicate that Trump offered Maduro and his family safe passage if he agreed to resign immediately.
Despite these aggressive tactics, experts caution that reviving Venezuela’s oil industry would not be straightforward, even if sanctions were lifted. The country’s heavy sour crude is challenging to extract, and decades of underinvestment have left its energy infrastructure in disrepair. Francisco J. Monaldi, the director of the Latin America Energy Programme at Rice University’s Baker Institute for Public Policy, estimates that Venezuela’s current crude output is just below 1 million barrels per day (bpd), with potential growth to between 4 and 5 million bpd if $100 billion is invested over the next decade.
Legal scholar and researcher José Ignacio Hernández described the state of Venezuela’s oil sector as “destroyed,” noting its unattractiveness for foreign investment, particularly for the U.S., which already boasts the world’s largest oil production. Hernández highlighted that while Maduro has offered U.S. companies access to the country’s oil and gold projects, Trump’s lack of acceptance suggests a broader agenda than merely securing energy resources.
The oil operations in Venezuela are largely controlled by state-owned Petróleos de Venezuela Sociedad Anónima (PDVSA), which manages about 50 percent of operations. U.S. oil giant Chevron holds a 25 percent stake, while joint ventures with China and Russia account for 10 percent each, and European companies represent 5 percent. Following the easing of restrictions on Chevron, the company has been importing between 150,000 and 160,000 bpd into the United States.
Looking ahead, experts argue that even a regime change would not automatically result in the U.S. gaining control over Venezuela’s oil assets. A new government would likely seek to avoid appearing too accommodating to foreign powers, especially if it wants to mitigate nationalist opposition. It is more plausible that any new administration would allow for increased access to foreign oil companies in exchange for substantial investments aimed at revitalizing Venezuela’s aging energy infrastructure.
As political tensions rise and the U.S. maintains its military posture, the situation in Venezuela remains precarious. The recent seizure of an oil tanker, coupled with ongoing military actions, indicates that the U.S. strategy towards Venezuela is far from resolved. With Maduro under pressure and international scrutiny, the future of the nation’s oil sector and its geopolitical implications remain uncertain.
