5 issues to learn about oil in Venezuela : NPR

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Matias Delacroix/AFP Tvia Getty Pictures Hours after the U.S. navy captured Venezuelan president Nicolás Maduro, President Trump made it clear that the U.S. operation is about — not less than partly — management of Venezuela's oil.

"We'll have our very giant U.S. oil firms, the largest wherever on this planet, go in, spend billions of {dollars}, repair the badly damaged infrastructure, the oil infrastructure, and begin getting cash for the nation," Trump mentioned throughout a press convention Saturday.

The seize of Maduro and Trump's feedback comes at a time when even a rustic like Venezuela — with one of many largest oil assets on this planet — is not a positive wager for attracting main oil firms.

Many oil firms have been bruised by their previous experiences working within the nation. The worldwide oil market is presently going through an oversupply. Oil costs are beneath $60 a barrel, and long-term projections for oil demand are unclear because the world shifts to extra electrical autos.

Trump guarantees to "run the nation" and make means for U.S. oil firms in Venezuela. Nonetheless, there is a lengthy historical past of U.S. interventions in Latin America and the Center East not going properly, oil specialists inform NPR.

Here is what it's good to learn about Venezuela's oil.

Venezuela has large oil reserves, however now produces a fraction of what it used to Venezuela was as soon as one of many largest international oil producers and was one of many fundamental founders of the Group of Petroleum Exporting International locations (OPEC), a bunch of among the world's largest oil producers, whose selections assist decide international oil costs. Venezuela has the most important confirmed reserves of oil on this planet, based on OPEC.

However whereas the nation was producing greater than 3 million barrels a day just a few a long time in the past, at present Venezuela produces solely about one million barrels a day, or roughly 1% of world oil output. The U.S. produces about 13 million barrels a day.

A lot of Venezuela's oil went to refineries within the U.S. Now a lot of it goes to China.

Not all crude oil is similar — some oil is bodily lighter and simpler for refineries to course of. Venezuela's oil is heavy and dense, and requires particular refineries. Burning any sort of oil contributes to local weather change, however Venezuela's oil is "among the many dirtiest oils on this planet to provide on the subject of international warming," says Paasha Mahdavi, affiliate professor of political science on the College of California, Santa Barbara.

<img src="https://npr.brightspotcdn.com/dims3/default/strip/false/crop/5616x3744+0+0/resize/1100/quality/50/format/jpeg/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2F23%2Fd2%2F8daaf3d544dab6d714c8b4611cb6%2Fap25355805251915-1.jpg" data-template="https://npr.brightspotcdn.com/dims3/default/strip/false/crop/5616x3744+0+0/resize/{width}/quality/{quality}/format/{format}/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2F23%2Fd2%2F8daaf3d544dab6d714c8b4611cb6%2Fap25355805251915-1.jpg" class="img" alt="The El Palito refinery rises above Puerto Cabello, Venezuela, Sunday, Dec. 21, 2025." loading="lazy"/> The El Palito refinery rises above Puerto Cabello, Venezuela, Sunday, Dec. 21, 2025. Matias Delacroix/AP Photograph conceal caption

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Matias Delacroix/AP Photograph Venezuela owes some U.S. oil firms billions U.S. oil firms like Chevron started drilling in Venezuela about 100 years in the past and performed a key position in growing the nation's oil sector.

However round 2004 to 2007, then-President Hugo Chávez "principally forcefully renegotiated contracts" with worldwide oil firms, says Francisco Monaldi, director of the Latin America Power Program on the Middle for Power Research at Rice College.

ExxonMobil and ConocoPhillips left the nation in 2007 after which took the Venezuelan authorities to worldwide arbitration courts. The courts ordered Venezuela to pay ConocoPhillips over $10 billion and ExxonMobil over $1 billion. Venezuela has solely paid a fraction of these sums to ExxonMobil and to ConocoPhillips.

Chevron, nevertheless, stayed in Venezuela — though " they did not prefer it," says Gerald Kepes, president of Aggressive Power Methods, an power consultancy in Washington, D.C.

Chevron at present produces a few quarter of Venezuela's oil.

In response to the information of Maduro's seize, Chevron spokesperson Invoice Turenne mentioned in an electronic mail, "Chevron stays centered on the protection and wellbeing of our staff, in addition to the integrity of our property. We proceed to function in full compliance with all related legal guidelines and rules."

Trump has mentioned that Venezuela has "stolen" U.S. funding within the nation's power sector.

Will U.S. oil firms return? Venezuela is what the oil trade calls a "brownfield" — that means it is properly established, and oil firms have a reasonably good thought of what they are going to discover once they drill. For firms like ConocoPhillips, returning to Venezuela might be a possibility to recoup among the billions owed to them by the federal government, Monaldi says.

In an electronic mail, ConocoPhillips spokesperson Dennis Nuss wrote, "ConocoPhillips is monitoring developments in Venezuela and their potential implications for international power provide and stability. It might be untimely to invest on any future enterprise actions or investments."

ExxonMobil didn't reply to a request for remark.

Nonetheless, this is not the most effective time so as to add to the worldwide oil provide, Monaldi says. There's presently a worldwide glut of oil. Additionally, as a result of Venezuela's oil is especially unhealthy for the local weather, that makes it much less enticing for European oil firms with local weather objectives, Monaldi says.

<img src="https://npr.brightspotcdn.com/dims3/default/strip/false/crop/3172x2115+0+0/resize/1100/quality/50/format/jpeg/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2Fec%2F00%2F809491f64123b8d32c8e500dfff5%2Fgettyimages-2232161023.jpg" data-template="https://npr.brightspotcdn.com/dims3/default/strip/false/crop/3172x2115+0+0/resize/{width}/quality/{quality}/format/{format}/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2Fec%2F00%2F809491f64123b8d32c8e500dfff5%2Fgettyimages-2232161023.jpg" class="img" alt="Aerial view of a ship at the Demerara river in Georgetown, Guyana on August 29, 2025." loading="lazy"/> Aerial view of a ship on the Demerara river in Georgetown, Guyana on August 29, 2025. JOAQUIN SARMIENTO/AFP by way of Getty Pictures conceal caption

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JOAQUIN SARMIENTO/AFP by way of Getty Pictures Venezuela's neighbor is a rising oil star Subsequent door to Venezuela is Guyana — a rustic that just lately found over 10 billion barrels of oil and is a key rising participant within the worldwide oil trade.

Guyana's oil is lighter than Venezuela's, much less polluting, and has decrease taxes than Venezuela, Monaldi says. There's additionally no nationwide oil firm in Guyana, as there may be in Venezuela.

"All that makes for Guyana to be one of the enticing oil locations on this planet," Monaldi says.

Whereas ExxonMobil is now not in Venezuela, it's a main participant in Guyana.

For years, Venezuela and Guyana have had a territorial dispute that has additionally been associated to grease rights. Final March, Venezuelan vessels entered Guyanese territorial waters approaching offshore oil vessels belonging to ExxonMobil.

"Surely, with a altering regime, Guyana ought to really feel safer," Monaldi says.

Lack of political stability might be a deal breaker Some enhance in Venezuela's oil manufacturing might occur pretty rapidly with extra monetary help and improved administration, based on an evaluation by Wooden Mackenzie, an power consultancy.

However Mahdavi says the Trump administration's plans to jumpstart the trade will likely be tough. He notes that it took practically twenty years to revitalize Iraq's oil trade after the U.S. invasion, although corruption and mismanagement stay pervasive.

And finally, notes Kepes, if it is unclear who's in cost in Venezuela, oil firms may have issues in regards to the long-term viability of their contracts. "Nobody's going to begin investing on the bottom in a spot the place there isn't any authorized contract and viable permission to function or if there's issues about political stability and violence," he says.