What's the future for Venezuelan oil?

Summary

---

Podcast Summary: Business Daily — What's the Future for Venezuelan Oil?

Host: Rahul Tandon, BBC World Service
Guests: Gideon Long (Latin America expert), Francisco Rodriguez (Venezuelan economist), Mariana Pragada (Reuters oil industry reporter), Jose Shalhoub (Political/Energy Analyst)
Date: January 5, 2026

---

Overview of the Episode

In the wake of Venezuelan President Nicolás Maduro’s dramatic removal from office, this episode examines the fate of the country’s vast oil reserves—the largest in the world. Host Rahul Tandon and a panel of experts discuss the collapse and possible revival of Venezuela’s oil industry, US interests under President Trump’s new administration, historical nationalization and foreign corporate involvement, economic stagnation, and the massive challenges ahead for any recovery effort.

---

Key Discussion Points & Insights

The Immediate Aftermath: Maduro’s Fall and US Announcements

• [01:18] The episode opens by narrating the extraordinary events in Venezuela: aerial assaults on Caracas, Maduro’s capture, and President Trump’s vow to oversee a “safe, proper and judicious transition.”
• Donald Trump (02:35):
  “We’re going to run the country until such time as we can do a safe, proper and judicious transition... We are going to run the [country].”

Why Venezuela's Oil Matters Globally

• Venezuela has an officially recognized 300 billion barrels of oil in reserves—around 17% of global reserves, surpassing even Saudi Arabia ([04:01], Gideon Long).
• Quote (Gideon Long, 04:01):
  “It’s a staggering figure. 300 billion barrels of oil... that's bigger even than Saudi Arabia.”
• The oil is heavy crude, located in hard-to-reach Orinoco Basin. Its extraction and processing require significant infrastructure, much of which is now obsolete.
• Only a few global refineries, mainly in the US Gulf Coast, can process this type of crude ([05:13]).

The Collapse of the Oil Industry and the Venezuelan Economy

• Years of underinvestment, falling global oil prices, and US sanctions have devastated production.

• Hyperinflation prompted the government to cut “11 zeros off the currency” ([06:50], Gideon Long).

• Gideon Long’s on-the-ground memory: “I remember being in Venezuela and seeing people carrying backpacks of cash around, and you had to just to buy a coffee or a meal in a restaurant.” ([06:50])

• Recent stabilization via “dollarization,” and a slight recovery in oil exports, mainly due to Chinese demand ([07:10]).

How Sanctions and Smugglers Shaped the Industry

• Significant US sanctions began in 2019, complicating exports ([07:45]).
• Tactics used: ships go dark (turn off transponders), employ ship-to-ship transfers to hide sanctioned Venezuelan oil shipments to China and India ([08:00]).
• Recent events include US Navy seizures and a full blockade of sanctioned tankers by Trump’s administration ([08:30]).

The 'Resource Curse' and a Troubled History of Oil

• Economist Francisco Rodriguez recalls the term “devil’s excrement” referring to oil’s problematic role in Venezuelan society since colonization ([09:11]).
  • Quote:
    “One of the first Spanish chroniclers… wrote that the indigenous population referred to it as the devil’s excrement...” ([09:11])
• History progression:
  • Early 20th century: Venezuela becomes a global oil power under foreign companies ([10:14]).
  • 1976: Nationalization, all foreign firms expelled, state company PDVSA forms ([10:41]).
  • 1990s: Some foreign oil companies return under service contracts.
  • 2007: Hugo Chávez imposes state-controlled joint ventures; Exxon and Conoco leave and sue, Chevron stays on under new terms ([11:44]).

Investment Needs and the Rocky Way Forward

• Trump’s promise ([13:10]): “The infrastructure is old, it’s rotted. Much of it is stuff that we put there 25 years ago and we’re going to be replacing it and we’re going to take a lot of money out so that we can take care of the country.”
• Mariana Pragada (Reuters) estimates $60+ billion needed to recover oil capacity to late 20th-century levels ([13:41]).
  • Quote:
    “More than $60 billion are needed... just to recover the capacity the Venezuelan industry had 20 years ago.”
• Current Venezuelan oil mainly exports to China, both as trade and to pay off debt ([14:15]).
  • If the US took over PDVSA, it could redirect oil away from China to US buyers – but such a move “couldn’t happen immediately” ([15:16]).
• Venezuela is “running out of time” to exploit reserves before global demand changes ([15:40]):
  • Quote:
    “It’s pretty much running out of time... to recover capacity is quite to scale a mountain, and then to go back to compete internationally is an even higher mountain.” ([15:40])

Do US Companies Really Want to Return?

• Jose Shalhoub (Caracas-based energy analyst): Unless there is political stability and legal certainty, foreign (especially US) companies will be wary ([17:05]).

  • Quote:
    “If they don’t see any type of political stability, any type of seriousness in terms of legal framework... I really doubt that they will... return to Venezuela.”

• Most Venezuelans primarily want economic relief, not specifically caring whether oil assets are controlled by the state or foreign companies ([17:45]).

  • Quote:
    “The most important headache for Venezuelans... is the economic crisis... The purchasing power of Venezuelans still living with the salary of misery, that’s the main concern.”

• Even with Maduro gone, systemic change and massive reforms are needed for a sustained recovery ([18:31]).

---

Notable Quotes and Memorable Moments

• Gideon Long on Hyperinflation:
  “I remember being in Venezuela and seeing people carrying backpacks of cash around, and you had to just to buy a coffee or a meal.” ([06:50])

• Francisco Rodriguez on the Oil Curse:
  “The indigenous population referred to it as the devil’s excrement ...” ([09:11])

• Donald Trump’s Takeover Vow:
  “We’re going to run the country until such time as we can do a safe, proper and judicious transition.” ([02:35]);
  “Our very large United States oil companies... go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.” ([03:12])

• Jose Shalhoub on Foreign Investment:
  “If they don’t see any type of political stability, any type of seriousness in terms of legal framework... I really doubt they will... return to Venezuela.” ([17:05])

---

Important Segment Timestamps

• 01:18: Episode introduction, Maduro’s fall, Trump’s statement
• 04:01: Venezuela’s oil reserves explained
• 05:13–06:03: Quality of crude, infrastructure, past US–Venezuela oil relations
• 06:18: State of Venezuela’s current economy
• 07:45: The impact of US sanctions, smuggling, and blockades
• 09:11: Historical and sociological perspectives on Venezuela's ‘oil curse’
• 10:41–12:47: History of nationalization and foreign involvement
• 13:10–13:41: Trump’s oil investment plan
• 13:41–15:16: Investment needs and China’s role
• 15:40: The urgency of reform and risk of being left behind globally
• 17:05: In-country perspectives on investment, ownership, and expectations
• 18:31: Uncertainty and the scale of the challenge

---

Conclusion

This tightly focused episode offers historical context and current analysis on why Venezuela, despite unmatched oil reserves, has failed to convert its resources into national prosperity—and underscores the immense hurdles facing any post-Maduro recovery. The potential for a US corporate comeback, China’s ongoing role, and the daunting tasks of rebuilding trust, infrastructure, and economic viability are all front and center. Both the promise and the peril of Venezuela’s oil future are laid bare—and the world is now watching what the next chapter brings.

---

Transcript

[BBC Announcer]

This BBC podcast is supported by ads outside the uk.

[Aramco Advertiser]

Who drives the world forward? The one with the answers or the one asking the right questions? At Aramco, we start every day by asking how? How can innovation help deliver reliable energy to the world? How can technology help develop new materials to reshape cities? How can collaboration help us overcome the biggest challenges? To get to the answer, we first need to ask the right question. Search Aramco Powered by How Aramco is an energy and chemicals company with oil and gas production as its primary business.

[BBC Announcer]

The best B2B marketing gets wasted on the wrong people. So when you want to reach the right professionals, use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals, including 130 million decision makers. And that's where it stands apart from other ad buyers. You can target your buyers by job title, industry, company role, seniority, skills, company revenue, so you can stop wasting budget on the wrong audience. It's why LinkedIn Ads generates the highest B2B return on ad spend of major ad networks. Spend $250 on your first campaign on LinkedIn Ads and get $250 credit for the next one. Just go to LinkedIn.com broadcast that's LinkedIn.com broadcast. Terms and conditions apply.

[Rahul Tandon]

Hello, this is Business Daily on the BBC World Service with me, Rahul Tandon. And on this special edition, we're looking at the state of the Venezuelan economy following the removal of its president, Nicolas Maduro.

[Gideon Long]

I remember being in Venezuela and seeing people carrying backpacks of cash around and you had to just to buy a coffee or a meal in a restaurant.

[Rahul Tandon]

But could there be better days ahead? Donald Trump certainly thinks so.

[Donald Trump]

We're going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars.

[Rahul Tandon]

We're asking what's the future for the world's largest oil, oil reserves. That's all coming up here on Business Daily. I'm sure that, like me, many of you have over the weekend been closely following what has been happening in Venezuela. It's been extraordinary. A little before 2:00am local time on Saturday, Caracas, the capital of Venezuela, came under aerial assault. By daylight, those explosions were over. The bombers had departed and the Venezuelan President Nicolas Maduro and his wife, Sila Flores, had been captured and were on their way to the U.S. shortly after that, the U.S. president Donald Trump had this to say.

[Donald Trump]

We're going to run the country until such time as we can do a safe, proper and judicious transition. So we don't want to be involved with having somebody else get in. And we have the same situation that we had for the last long period of years. So we are going to run the.

[Rahul Tandon]

Country here on Business Daily. We wanted to look in detail at one crucial aspect of the story. Oil. Because it's central to Venezuela's beleaguered economy. And Donald Trump has made it clear that he wants U.S. companies in charge of the industry.

[Donald Trump]

As everyone knows, the oil business in Venezuela has been a bust, a total bust. For a long period of time, they were pumping almost nothing by comparison to what they could have been pumping and what could have taken place. We're going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.

[Rahul Tandon]

So why is Donald Trump so keen on Venezuelan oil? How big are its reserves? To find out, let's bring in a familiar voice on our business programs and hear from our very own Latin American expert, Gideon Long, who worked for many years covering Venezuela for the Financial Times and has been to the country on many occasions.

[Gideon Long]

Well, it's a staggering figure. 300 billion barrels of oil. That's the official reserves figure for Venezuela. And this is not a figure that Venezuela has made up. It is the official figure that's been ratified by OPEC that's bigger even than Saudi Arabia. And just to put that into context, 300 billion barrels is about 17% of global oil reserves in total. So it is an astonishing figure.

[Rahul Tandon]

The other crucial factor is what type of oil is it?

[Gideon Long]

It's all very well having the biggest oil reserves in the world, but if you haven't got the infrastructure to get that oil out of the ground, it's not much good to you. And Venezuela doesn't really have that infrastructure anymore. It's been so decimated after decades of underinvestment. Secondly, you have to think about what that oil is. It's very heavy crude. And the crucial thing about it as well is that this oil is in the east of the country, in the Orinoco Basin, and it's relatively inaccessible. A lot of it is jungle, so it's not very easy to get out of the ground. And then the final consideration, Rahul, is that this is very heavy crude. So there's a lot of it, but it's not the best quality oil in the world, and it needs extensive processing. And the crucial thing is that there are only a few places in the world that are capable of processing that very heavy Venezuelan Crude.

[Rahul Tandon]

That is interesting, isn't it, Gideon? Because that may give us another clue as to why President Trump is so interested in Venezuelan oil. Because some of those refineries which can deal with this sort of oil are in the United States, around Texas.

[Gideon Long]

In particular, they are in the Gulf of Mexico. So until fairly recently, when Nicolas Maduro came to power In Venezuela in 2013, the United States was actually the biggest buyer of Venezuelan oil in the world. It used to buy around 40% of Venezuela's oil each year, and that was precisely because they had the processing capacity in the Gulf of Mexico to process it. So it was a marriage made in heaven, really. The United States had access to heavy crude nearby in Venezuela. It didn't have to go to the Middle east or to Russia for it. And it had the processing capacity, and it worked well for both countries.

[Rahul Tandon]

So here we have a country with more oil reserves than anywhere else on the planet. As you've said that there are problems, but surely with so much oil, that's helped develop its economy. What is the state of the economy in Venezuela at the moment?

[Gideon Long]

It's certainly much worse than it was if you go back to what I think of the kind of the heyday of Venezuela back in the 70s, 80s, 90s. But it has recovered slightly from when I first went to Venezuela, which was in 2016. Really, in the years that followed 2016, the economy fell apart. Production was falling. Oil prices globally were falling, particularly in 2014, and the country went through massive hyperinflation. The Maduro government, just in the time that he's in power, has cut 11 zeros off the currency.

[Rahul Tandon]

Wow.

[Gideon Long]

Because the banknotes were just worthless. I mean, I remember being in Venezuela and seeing people carrying backpacks of cash around, and you had to just to buy a coffee or a meal in a restaurant. The hyperinflation has eventually burnt itself out, and the country is effectively dollarized, and that's brought some stability. So if you go to Venezuela now, most things you can buy in dollars, and that has brought some stability to the economy. And actually, oil production and oil exports have been rising slightly in the last couple of years after a low Point in 2020, and that's partly due to an increase in demand for Venezuelan oil from China.

[Rahul Tandon]

Let's end this conversation with you on. On the challenges that have faced the oil industry under the Maduro regime, because we've seen sanctions from the U.S. haven't we, on Venezuelan oil? And recently we've had that blockade of venezuela by the U.S. that's right.

[Gideon Long]

I mean, the first big sanctions on the Venezuelan oil industry were imposed in 2019 during President Trump's first administration. And they've made it difficult for Venezuela to export its oil. So what tends to happen is that sanctioned ships go into Venezuela and they go dark. They turn their transponders off, they load up with oil, and then they leave the country with their transponders off. And quite often they then pass that oil from one oil tanker to another to a non sanctioned tanker, and it then finds its way to places like India and China. So it's a complicated operation that's been going on for several years. And then what we saw in December was US Forces seizing an oil tanker off the coast of Venezuela. This was the skipper, the name of the tanker, and they took the tanker to the United States. And then more recently, Donald Trump ordered a total and complete blockade of all US Sanctioned oil tankers entering and leaving Venezuela. Now, the Americans say that basically what they're doing is just enforcing sanctions, but obviously this has had a crippling effect on Venezuelan oil exports. It's made it very difficult for them to get their oil out of the country.

[Rahul Tandon]

Thanks, Gideon, as always. So we've given you a sense of the scale of those oil reserves and why the Trump administration is so interested in them. But Venezuela may have lots of oil, more than any other country on this planet, but it has always had an uneasy relationship with its main asset. Here's the Venezuelan economist Francisco Rodriguez, one.

[Francisco Rodriguez]

Of the first Spanish chroniclers who wrote about Venezuela, actually chronicled that the native, the indigenous population referred to it as the devil's excrement. So it was this kind of black liquid that nobody knew what to do with it and it was just completely useless, but they knew that it was there. And in fact, many years later, when the country lived through a resource boom and was unable to use the resources for sustainable improvements in the well being of Venezuelans, the famous Venezuelan thinker brought back the name the Devil's Excrement to talk about oil, to talk about the problems of the resource curse. So Venezuelans have always known that there was oil there. It was in the late 19th century and early 20th century that some people actually began to realize, well, there's use for that oil, there's economic use for that oil. And then in the early 20th century, there's the discovery of an important field that was the first one that actually became commercially exploited.

[Rahul Tandon]

By the mid-1930s, Venezuela, under the leadership of the military dictator Joan Vicente Gomez, had become the world's second largest oil producer and the world's largest exporter. It also brought many foreign oil companies into the country, many from the US but that changed when President Carlos Andres Perez nationalized the industry with the Petrolist of Venezuela taking over the sector. Here's Francisco Rodriguez once again.

[Francisco Rodriguez]

1975 is the year in which the decree was issued. It began with full force on January 1st of 1976. All foreign companies left Venezuela in 1976, though the 1976 law said that oil production was going to be completely carried out by the Venezuelan state. So all of them left. It did leave open that loophole of the service contracts, but that loophole was not used until the 1990s.

[Rahul Tandon]

The big American oil companies did eventually return. They came back in the 1990s when they were paid service contracts to operate the oil fields. Millions of dollars went onto their balance sheets. But that changed when this man came to power in Venezuela in 1999.

[Donald Trump]

La Transformaciones Democratic Necessaries.

[Rahul Tandon]

Hugo Chavez wanted to redistribute wealth and transform Venezuela into a socialist economy. So it was no surprise, says Francisco Rodriguez, that he turned his attention to Venezuela's most important industry.

[Francisco Rodriguez]

He was a promoter of nationalization, state led development. He nationalized a lot of industries. But he didn't actually start talking about changing the ownership of the oil industry until 2006. And that's a moment in which he said, and particularly in 2007, he went to the foreign oil companies and said, I'm going to change the terms under which you work with us. You're no longer going to have these contracts. We're going to convert those contracts into joint ventures with the state owned oil company pdvesta, and you're going to be minority partners. Those are the new conditions. Take it or leave it. Some of them took it, particularly Chevron. That's the reason why Chevron is still in Venezuela, because they took the deal offered by Chavez. Two American oil companies, which were Exxon and Conoco, said, no, we're not going to take it. You are violating our contracts and we are going to take you to court.

[Rahul Tandon]

You're listening to Business Daily with me, Rahul Tandon. And we're looking at the country with the world's largest proven oil reserves, Venezuela, and why it struggled to develop them. Gideon has given us some reasons. Here's another one. A lack of investment in the oil sector. So with Nicolas Madura now gone, could that investment return? Donald Trump certainly thinks so.

[Donald Trump]

It's actually very dangerous. It's, you know, blow up territory. Oil is very dangerous. It's a very dangerous thing to take out of the ground can kill a lot of people. It has killed a lot of people doing just that. The infrastructure is old, it's rotted. Much of it is stuff that we put there 25 years ago and we're going to be replacing it and we're going to take a lot of money out so that we can take care of the country.

[Rahul Tandon]

President Trump confidence is always there, but how much investment is actually needed?

[Mariana Pragada]

More than $60 billion are needed in general for making it work again and just recover the capacity the Venezuelan industry had 20 years ago. And even more than that, Venezuela really wants to switch to produce renewable fuels, biofuels.

[Rahul Tandon]

Mariana Pragada, who's from Venezuela and who covers the Latin American oil industry for the Reuters news agency, China, of course, is the biggest buyer of Venezuelan oil. So will that now continue with Nicolas Maduro no longer in charge? Here's Mariana Once again, Venezuela sells over.

[Mariana Pragada]

80% of its crude to Chinese independent refineries and a portion of those sales also go for repaying debt to China. Of course, Venezuela needs is not a matter of deciding, it's a matter of need to continue selling its oil to China. But the way Trump spoke yesterday on the overseeing of the Venezuelan oil industry was really shocking because it made it look like the US Is willing to take over pd, which is something he didn't say with those words, but he did talk about the US Running the transition in Venezuela. And if that's the case, of course that would need to pass through the taking over of the main Venezuelan companies, the state companies, including pd, if that happens. In that scenario, of course that if the US Takes over pd, the US could make the decision of selling the crude to somebody else, take the barrels out of the Chinese pockets and put it in the US Pockets by example.

[Rahul Tandon]

Right.

[Mariana Pragada]

But that is not something that could happen immediately.

[Rahul Tandon]

As we look ahead now, it is a new period of time for Venezuela. Can you see any way in which it can develop its oil assets to bring in much needed money into the economy in the short term, or is it going to be a very long term path back for the industry to get back on track?

[Mariana Pragada]

Well, Venezuela doesn't have the long term. When you see Venezuela in the context worldwide, is very interesting to see how Venezuela is running out of time for tapping the very vast reserves it still has on the ground. You can see other countries like Brazil tapping its reserve as soon as it can and at the same time try to diversify this production to produce more biofuels and diversifying accordingly to the market request, the market demand. So it's pretty much running out of time. So if you see what Pedesa needs to, to do first to just recover the capacity it had in the 90s, it's quite a thing. It's quite to scale a mountain and then to go back to compete in the international markets, even with the neighbors, even with the South American companies, it is an even higher mountain. So it's very difficult for PSA as a state company to achieve that. I don't see a scenario, even if there's a positive regime change in Venezuela in the coming years, that Peresa could be up par.

[Rahul Tandon]

Donald Trump has said we heard it earlier in the program that US Companies will invest in Venezuela now once again. But do they want to return and will they be welcomed back? We wanted to hear from somebody inside Venezuela. Jose Shalhoub is in Caracas. He's a political and energy analyst at Jose Parejo and Associates and he used to be an analyst at the state owned Venezuelan oil and gas company.

[Jose Shalhoub]

If they don't see any type of political stability, any type of seriousness in terms of legal framework, that it's beneficial for them and beneficial for Venezuela as well. You know, I really doubt that they will, that they would likely return to Venezuela.

[Rahul Tandon]

You are in Venezuela at the moment, aren't you?

[Jose Shalhoub]

Yeah, yeah, yeah. I was born, raised in Venezuela and I'm currently in Caracas.

[Rahul Tandon]

Do the Venezuelan people, and it's always difficult to generalize, do they care who owns their assets, whether it's the American oil companies, whether it's the Venezuelan government, are they bothered about that or do they just want them developed so that the country can benefit from them?

[Jose Shalhoub]

The most important headache for Venezuelans for years, for years is the economic crisis that has been worsening in the last recent months due to the collapse again of the local currency. The believer, the purchasing power of Venezuelans still living with the salary of misery, that's the main concern. And they wouldn't care whoever associates with Venezuelan government as long as they see an economic recovery.

[Rahul Tandon]

You've been part of the company that has run the Venezuelan oil industry. You've been an analyst there. You've advised people on what should be done. Do you think Donald Trump removing Nicolas Maduro will be good for the Venezuelan oil industry in the end?

[Jose Shalhoub]

That'll depend on the changes that will be or would likely be carried out. So there is still uncertainty of what's going to happen in the next, I don't know, days, weeks and months. I mean, you need to carry out a massive system or mechanism of changes inside the Venezuela settler company. And and that's going to take time.

[Rahul Tandon]

As Jose said that Nicolas Maduro may no longer be in charge of the Venezuelan government, but there are still huge challenges facing the country's most important industry and tackling them will be top of the to do list for the country's next president. That's it from this edition of Business Daily. I'm Rahul Tandon with thanks to reporter Gideon Long and producer Justin Bones. Please subscribe wherever you get your BBC podcasts.

[Aramco Advertiser]

Who drives the world forward? The one with the answers or the one asking the right questions? At Aramco, we start every day by asking how? How can innovation help deliver reliable energy to the world? How can technology help develop new materials to reshape cities? How can collaboration help us overcome the biggest challenges? To get to the answer, we first need to ask the right question. Search Aramco Powered by How Aramco is an energy and chemicals company with oil and gas production as its primary business.

[Genius Bank Advertiser]

Introducing Genius bank, the award winning bank that does things differently for our kind of genius spelled with a J Award winning can mean many things, like most locations, but who still goes to the bank? For us? Award winning means best newcomer bank of 2025 by Bankrate. Visit geniusbank.com Genius with a J Genius Bank Registered Trademark is a division of smbc. Manuvanc Awards are independently granted by their respective publication and are not indicative of future success or results.

[Aramco Advertiser]

Who drives the world forward? The one with the answers or the one asking the right questions? At Aramco, we start every day by asking how? How can innovation help deliver reliable energy to the world? How can technology help develop new materials to reshape cities? How can collaboration help us overcome the biggest challenges? To get to the answer, we first need to ask the right question. Search Aramco Powered by How Aramco is an energy and chemicals company with oil and gas production as its primary business.