oil

The administration of President Donald Trump has made it clear in recent weeks that U.S. oil companies will not recover compensation for assets expropriated by Venezuela more than two decades ago unless they return to the country and commit substantial new investment. The White House and the State Department have informed firms that any financial settlement will be conditional on actively helping to revive Venezuela’s severely damaged oil industry.

A Dispute Rooted in the Chávez Era
In the early 2000s, Venezuela—under then-president Hugo Chávez—expropriated the assets of several international energy companies after they refused to grant greater operational control to the state oil company PDVSA, as demanded by the government.
While Chevron negotiated a way to remain in the country through joint ventures with PDVSA, rivals such as ExxonMobil and ConocoPhillips exited Venezuela and pursued international arbitration to recover losses.

Trump: Regime Change Would Unlock Vast Oil Reserves
The renewed push follows President Trump’s weekend remarks suggesting that the removal of Venezuelan president Nicolás Maduro would “unlock” the country’s oil reserves—estimated at $17.3 trillion in value. Venezuela currently holds the largest proven oil reserves in the world, despite producing only a fraction of its historical output.
Trump has also stated that American companies are expected to lead efforts to rebuild Venezuela’s oil sector, provided they are willing to finance the recovery largely with their own capital.

Investment as a شرط for Settling Expropriation Claims
According to U.S. officials familiar with discussions with oil industry executives, compensation for past expropriations will not be automatic. Companies would first need to invest heavily in restoring production, refining capacity, and export infrastructure before any old claims are addressed.
This approach would be particularly costly for firms that previously relied on arbitration. ConocoPhillips reportedly spent nearly $12 billion after its Venezuelan assets were nationalized, while ExxonMobil sought to recover about $1.65 billion in lost profits through international legal proceedings.
Attention to these disputes intensified again last month after President Trump ordered a blockade of Venezuelan oil tankers, bringing the issue of historic expropriations back into focus.

Oil Companies Weigh the Risks of Returning
Energy companies remain cautious. A spokesperson for ConocoPhillips said the firm is closely monitoring developments in Venezuela, particularly their potential impact on global energy supply and stability, but stressed that it is too early to discuss any concrete investment or business plans. The company reiterated this position when asked about possible talks with government officials.
ExxonMobil did not immediately respond to media inquiries.
Analysts warn that even if U.S. oil companies decide to return, it could take years for production to increase meaningfully. Despite vast reserves, Venezuela’s output has collapsed over time due to mismanagement, lack of investment, and U.S. sanctions.

Structural Challenges and Political Uncertainty
Experts note that companies considering a return would face multiple obstacles, including:
Unclear contractual and legal frameworksSecurity risksSeverely deteriorated infrastructureQuestions over the legality of U.S. actions against President MaduroThe risk of prolonged political instability
Venezuela, a founding member of OPEC, was once a major global oil producer. By 2010, however, output had fallen below 2 million barrels per day, and the decline continued in subsequent years.
Last year, Venezuela produced an average of just 1.1 million barrels per day, a small fraction of global supply and a stark contrast to its former status as a leading oil exporter.

Skepticism Persists Despite Political Rhetoric
Although President Trump has suggested that U.S. firms could invest billions of dollars to rebuild Venezuela’s energy infrastructure, analysts remain cautious. Many question whether oil companies will be willing to commit capital in such a highly uncertain and volatile environment.
According to analysts including Helima Croft, some market participants may embrace a “mission accomplished” narrative and plan for a rapid return to 3 million barrels per day of production. More conservative estimates, however, suggest that only several hundred thousand barrels per day could be added over the next 12 months, and only if sanctions are eased and a smooth transfer of power occurs.
“Conditions remain extremely fluid,” the analysts concluded, “and the road back for Venezuela will be long and challenging.”

#venezuela , #TRUMP , #oil , #USPolitics , #Geopolitics

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🇺🇸🇻🇪 President Trump stated that the United States would use Venezuela's oil reserves and sell "large quantities" of them to other countries after the capture of Nicolás Maduro.
American oil companies will invest billions of dollars in Venezuela, repair the country's crumbling #oil infrastructure, and begin generating profits for the country,Chinese #OilStocks fell amid concerns that the US kidnapping of Nicolas Maduro could disrupt China's access to #oil
Means we Oil prices will go down may be 50 usd/barrel
#Oil #OilMarket #OilPrice

Trump has claimed that the U.S. is moving to take control of Venezuela’s massive oil reserves — valued at a staggering $17.3 TRILLION. If acted on, this could become one of the largest energy power moves in recent history.
This isn’t just about oil—it’s about geopolitical influence, global supply-chain control, and shifting energy flows. Any serious U.S. sway over Venezuela’s production could impact prices, pressure other producers, and spark major volatility across multiple markets.
⚠️ Why traders are watching:
• Potential for sharp swings in oil prices
• Changing dynamics for energy producers
• Ripple effects across commodities, FX, and even crypto
Remember: headlines move fast, execution is slower. Bold claims don’t always mean immediate action. Smart traders stay patient, watch for confirmation, and manage risk while volatility builds ⚡
So… is this the start of a new energy supercycle, or just headline-driven noise? 👀👇
📊 Assets to watch:
$US | $U | $TRUMP

As Donald Trump unveils his ambitious plan to revive Venezuela’s oil sector with U.S. support, investors and energy executives are pouring cold water on the idea. Wall Street is signaling clear skepticism: a quick rebound is unrealistic, and the risks—both political and financial—are immense.
News of potential recovery triggered a selloff in major U.S. energy stocks, while analysts warned that logistical breakdowns and decades of mismanagement in Venezuela’s oil sector could stall any real progress for years to come.

$100 Billion Needed – and a Decade of Work Ahead
According to Bloomberg, restoring Venezuela’s oil infrastructure would require over $100 billion in investment and at least ten years of rebuilding—and that’s the optimistic scenario.
Francisco Monaldi, energy policy director for Latin America at Rice University’s Baker Institute, said that bringing production back to 1970s levels—nearly 4 million barrels per day—would demand $10 billion in annual capital for a decade.
“A faster recovery would require even more aggressive spending,” he added. Venezuela is currently producing only around 1 million barrels per day, despite having the largest proven oil reserves in the world.

Infrastructure Collapse: Ports, Pipelines, and Refineries in Ruin
Following years of economic decline under Nicolás Maduro—who was captured by U.S. forces last weekend—the oil infrastructure lies in disarray:
🔹 Port operations are sluggish – supertanker loading takes up to 5 days, versus 1 day seven years ago

🔹 Oil platforms are abandoned – some are stripped for parts in broad daylight

🔹 Pipelines are corroding and leaking, some reportedly dismantled and sold as scrap by the state oil company

🔹 The once-mighty Paraguana refining complex now runs intermittently at minimal capacity; some units are completely offline
The country can’t even refine what little oil it still extracts, as key facilities are non-functional or obsolete.

Wall Street Says: Don’t Buy the Hype
Analysts at RBC Capital Markets, including Helima Croft, warned that hopes for a quick output boom are wishful thinking.
“Some will treat this like a ‘mission accomplished’ moment,” they wrote, “but reaching 3 million barrels per day is highly unlikely anytime soon—even if sanctions are lifted and political power transitions smoothly.”
Neil Shearing, chief economist at Capital Economics, added that having the world’s largest reserves means little without the capacity to exploit them. Even if Venezuela achieved 3 million barrels per day, he noted, it would only add about 2% to global supply.

Oil Prices React—But Gains Will Be Limited
Goldman Sachs analysts suggest Venezuela’s situation could shift Brent crude prices by about $2 per barrel in either direction. If production increases, prices may ease. If output falters, prices could rise.
Their long-term model shows that if Venezuela reaches 2 million barrels per day by 2030, it could lead to a $4-per-barrel decline in Brent prices compared to current projections.

Chevron Holds On—Exxon and Conoco Stay Away
Chevron remains the only major U.S. oil company currently operating in Venezuela. It accounts for roughly 25% of the country’s current output, under a special license allowing it to bypass certain U.S. sanctions.
ExxonMobil and ConocoPhillips, both of which had assets expropriated in the early 2000s under Hugo Chávez, are still absent. Exxon has stated it will only consider returning if conditions change significantly.
Chevron, meanwhile, remains cautious:
“We continue to prioritize the safety of our people and the protection of our assets in Venezuela, operating in full compliance with all applicable laws and regulations,” the company said.

#TRUMP , #oil , #venezuela , #WallStreet , #Geopolitics

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Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“