The allure of Venezuela's vast oil reserves has captivated Donald Trump's imagination, with some speculating that he hopes to reap the benefits of cheap oil to boost the US economy. However, a closer examination reveals that Trump's vision is built on shaky ground.
One major reason for this skepticism lies in the global market itself. With oil prices at their lowest since 2021, Venezuela's precious crude has become increasingly uneconomical to extract. Wood MacKenzie estimates that Brent crude must reach $80 a barrel to justify new investment in Venezuelan wells – a benchmark last breached over a year ago. At current prices between $58.7 and $62.3, it's hard to envision Trump's dream of tapping into Venezuela's oil riches.
Moreover, Venezuela's own production capabilities are limited, accounting for just 1% of global oil output last year. The country's infrastructure is in dire need of major investment to restore its decrepit facilities, which makes it an even more daunting task to extract the remaining oil reserves.
Furthermore, any potential deal with Trump or the Venezuelan government would be fraught with risk. Oil contracts are notoriously prone to being abrogated once a new government takes over, and there's always the specter of violence and instability hanging over the country. As Emily Meierding notes, "crude oil is not a quickly or easily lootable resource" – a phrase that echoes George W Bush's decision to return Iraq's oil infrastructure to the Iraqi government during his occupation.
The economic case for Venezuelan oil is even more tenuous. The US economy has become increasingly reliant on domestic production, with energy efficiency and reduced dependence on foreign oil driving growth over the past two decades. Multinational oil companies like ExxonMobil have already begun to sniff out other opportunities abroad, leaving Venezuela's riches looking less appealing by the day.
In fact, Iraq serves as a relevant precedent for Trump's Venezuelan venture. Western oil firms flocked to bid on Iraq's oil assets during auctions in 2008 and 2009 but were eventually priced out of the market due to production disruptions and payment arrears. It's likely that US companies would follow a similar path, opting instead to procure whatever oil is needed domestically.
In conclusion, Trump's vision for tapping into Venezuela's oil riches seems more like a pipe dream than a viable strategy. The global market, Venezuela's own limitations, and the risks of doing business in the country all combine to make it an unappealing proposition for US companies.
One major reason for this skepticism lies in the global market itself. With oil prices at their lowest since 2021, Venezuela's precious crude has become increasingly uneconomical to extract. Wood MacKenzie estimates that Brent crude must reach $80 a barrel to justify new investment in Venezuelan wells – a benchmark last breached over a year ago. At current prices between $58.7 and $62.3, it's hard to envision Trump's dream of tapping into Venezuela's oil riches.
Moreover, Venezuela's own production capabilities are limited, accounting for just 1% of global oil output last year. The country's infrastructure is in dire need of major investment to restore its decrepit facilities, which makes it an even more daunting task to extract the remaining oil reserves.
Furthermore, any potential deal with Trump or the Venezuelan government would be fraught with risk. Oil contracts are notoriously prone to being abrogated once a new government takes over, and there's always the specter of violence and instability hanging over the country. As Emily Meierding notes, "crude oil is not a quickly or easily lootable resource" – a phrase that echoes George W Bush's decision to return Iraq's oil infrastructure to the Iraqi government during his occupation.
The economic case for Venezuelan oil is even more tenuous. The US economy has become increasingly reliant on domestic production, with energy efficiency and reduced dependence on foreign oil driving growth over the past two decades. Multinational oil companies like ExxonMobil have already begun to sniff out other opportunities abroad, leaving Venezuela's riches looking less appealing by the day.
In fact, Iraq serves as a relevant precedent for Trump's Venezuelan venture. Western oil firms flocked to bid on Iraq's oil assets during auctions in 2008 and 2009 but were eventually priced out of the market due to production disruptions and payment arrears. It's likely that US companies would follow a similar path, opting instead to procure whatever oil is needed domestically.
In conclusion, Trump's vision for tapping into Venezuela's oil riches seems more like a pipe dream than a viable strategy. The global market, Venezuela's own limitations, and the risks of doing business in the country all combine to make it an unappealing proposition for US companies.
. I mean, the prices are pretty low right now 
. Like Wood MacKenzie says, you'd need like $80 a barrel just to break even 
. And let's not forget that Venezuela's production capabilities are super limited 
. They're barely churning out 1% of global oil output 
. And with all the risks involved - contract disputes, violence, instability... it's just not a good bet for US companies 
. Plus, the US is already so dependent on domestic oil production, why would they want to invest in Venezuela when they've got other options abroad? 
Iraq's experience with Western oil firms trying to do business there is a pretty clear precedent 
. Trump should probably focus on more viable energy strategies instead of chasing after a pipe dream 
. plus venezuela's own infrastructure is a mess so even if trump does get his hands on the oil, hes gonna have to spend a ton of money to fix up the wells and pipelines before it can even make sense economically 
. not to mention theres already other countries like iraq that are trying to sell off their own oil assets at similar prices, so its def not like venezuela is going to be the next big thing in the energy market 
it'd be like he's got a magic wand or something. but seriously though, have you seen how much debt venezuela's in? it's insane 
. plus, any contract would just be waiting to get messed up by the next government change 
or worse, some violent unrest 
. it's like trying to make money from a sinking ship 
. meanwhile, the us is all about being energy-independent and all that 
THE OIL PRICES ARE LOW AND VENEZUELA CAN'T EVEN PRODUCE THAT MUCH OIL ANYWAY, PLUS THERE'S ALWAYS GOING TO BE RISK OF STABILITY ISSUES IN THE COUNTRY. I THINK HE SHOULD FOCUS ON OUR DOMESTIC OIL RESOURCES INSTEAD OF CHASING AFTER SOME DREAMY VENEZUELAN OIL. AND WITH IRAQ AS A PRECEDENT, IT'S PROBABLY NOT GOING TO END WELL FOR HIM 