President Donald Trump’s push to revive Venezuela’s oil sector following direct U.S. military intervention and the removal of Nicolás Maduro has opened what analysts describe as one of the biggest geopolitical and financial gambles of his second presidency, with potential costs and risks estimated at more than US$100 billion.
The plan, outlined by senior administration officials and energy advisers, is built on the idea that Venezuela’s vast crude reserves, the largest proven reserves in the world, can be rapidly restored to global markets under a new, U.S.-backed political order. Washington believes that reviving Venezuelan oil production could stabilize global energy prices, reduce U.S. reliance on Middle Eastern supply chains, and weaken the influence of China, Russia and Iran in Latin America.
Before years of mismanagement, sanctions and underinvestment, Venezuela produced more than 3 million barrels of oil per day. By late 2025, output had collapsed to around 700,000 barrels per day, according to data from OPEC and independent energy trackers. U.S. officials say production could be lifted to at least 2 million barrels per day within five years if sanctions are lifted, infrastructure rebuilt and foreign capital flows return.
However, industry experts warn that the scale of decay at state oil firm PDVSA makes any rapid recovery unrealistic. Refineries are operating far below capacity, pipelines are corroded, power shortages are widespread, and a large portion of the skilled workforce has fled the country. Analysts at S&P Global and Wood Mackenzie estimate that restoring fields, refineries and export terminals would require between US$80 billion and US$120 billion in fresh investment.
Trump’s strategy reportedly hinges on allowing major U.S. and allied energy firms, including Chevron, ExxonMobil and European oil majors, to take leading roles in rehabilitating Venezuela’s oil sector under new production-sharing agreements. The administration is also considering partial debt-for-equity swaps tied to Venezuela’s defaulted sovereign and PDVSA bonds, potentially restructuring more than $150 billion in outstanding obligations.
The geopolitical risks are significant. While Washington frames its actions as supporting democracy and economic recovery, critics say the intervention could fuel long-term instability. Armed groups, pro-Maduro factions and fragmented security forces remain active across parts of the country. Any sustained violence could disrupt oil operations and deter foreign investors wary of security and reputational risks.
There is also uncertainty over how global markets would absorb a surge in Venezuelan crude. While additional supply could help cap oil prices, especially if OPEC+ maintains production discipline, a sudden return of large Venezuelan volumes could trigger internal tensions within the cartel. Venezuela remains an OPEC member, and its reintegration would complicate already delicate production quota negotiations.
China and Russia, both major creditors to Venezuela, are closely watching developments. Beijing has invested tens of billions of dollars in Venezuelan oil-backed loans over the past two decades, while Russian firms such as Rosneft previously held stakes in key projects. Analysts say any U.S.-led restructuring that sidelines these interests could provoke diplomatic and economic retaliation, particularly in other regions where Washington seeks cooperation.
Domestically, Trump’s plan is also controversial. Critics in Congress argue that U.S. taxpayers could ultimately bear the cost if security operations expand or if American-backed reconstruction efforts fail. Human rights groups have raised concerns about civilian casualties, political repression during the transition period, and whether oil revenues would genuinely benefit ordinary Venezuelans rather than a new elite.
Supporters of the plan counter that the alternative, a collapsed Venezuelan state sitting atop vast energy resources, poses a greater long-term threat. They argue that reviving oil production could fund humanitarian relief, stabilize the economy, and stem migration flows that have strained neighboring countries and the U.S. southern border.
For now, markets remain cautious. Oil prices showed only modest movement following news of the intervention, reflecting skepticism over how quickly Venezuela can realistically return as a major producer. Investors appear to be waiting for concrete legal frameworks, security guarantees and clarity on sanctions relief before committing capital.
Whether Trump’s Venezuela oil revival becomes a strategic masterstroke or a costly miscalculation will depend on factors far beyond crude reserves, including political legitimacy, regional stability and the willingness of global energy players to bet billions on a country emerging from years of crisis.
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