Ryan Knudsen (2:57)

Venezuela has one of the largest oil reserves in the world. Here's our colleague Colin Eaton, who covers the oil industry.

Colin Eaton (3:06)

The government of Venezuela has estimated that reserves of oil in Venezuela are around 300 billion barrels. There have been other estimates that peg that number lower, but they seem to all agree that it's quite massive.

Ryan Knudsen (3:23)

Venezuela is actually estimated by some to have more oil than Saudi Arabia. But despite the country's vast and very valuable resources, the oil industry in Venezuela has struggled, especially since it was taken over by the government in the early 2000s under then President Hugo Chavez.

Colin Eaton (3:40)

So in 2006, 2007, Hugo Chavez government nationalized the oil assets in Venezuela and essentially kicked out some major players, including ExxonMobil and ConocoPhillips. That was the start of a decline in the quality of Venezuela's oil production.

Ryan Knudsen (4:07)

Today, the only US energy company with a significant presence in Venezuela is Chevron. Most of the country's oil is produced by the state run Petroleos de Venezuela, or pdvesa, which after decades of corruption and mismanagement, diminished the Venezuelan oil industry. Now only a fraction of the country's estimated 300 billion barrels are actually coming out of the ground.

Colin Eaton (4:29)

So those massive reserve numbers are illusory in the sense that at the moment, Pedavasa and Chevron and other companies haven't been extracting huge amounts of oil. So currently Venezuela is producing about 900,000 barrels a day. That's about 1% of global oil production on a daily basis.

Ryan Knudsen (4:58)

For decades, the US has been at odds with Venezuela, including the Trump administration. Starting in his first term, here's former Treasury Secretary Steven Mnuchin announcing sanctions.

Steven Mnuchin (5:09)

By sanctioning Maduro, the United States makes clear our opposition to the policies of his regime and the support for the people of Venezuela.

Ryan Knudsen (5:21)

In 2019, the US imposed a near total economic embargo on the country and on Pdvesa, preventing it from selling crude oil legally to the U.S. it was.

Colin Eaton (5:31)

A big moment for oil markets, which had gotten a lot of heavier crude from Venezuela. The refineries in the Gulf coast were scrambling to find other sources of crude. So the Trump administration put those sanctions in place as part of its sort of maximum pressure campaign. In an effort to pressure Maduro to leave power.

Ryan Knudsen (5:59)

The Biden administration loosened those sanctions. But during his second term, Trump focused on Venezuela again as several of the administration's priorities converged there. Maduro was the thorn in the side of the US on multiple fronts. He resisted taking back planeloads of Venezuelan migrants. He was alleged to be directly involved with drug cartels. And he held on to power despite losing an election in 2024. Some in Trump's inner circle, including US Secretary of State Marco Rubio, have also been pushing for regime change.

Colin Eaton (6:31)

Marco Rubio, MIKE WALZ Other US lawmakers, particularly from Florida, have been adamant that Maduro is a threat not only to the Venezuelan people, but to surrounding countries.

Ryan Knudsen (6:52)

So last year, the Trump administration started dialing up the pressure once again and pushing Maduro to step down and go into exile. It started with multiple strikes on Venezuelan boats in the Caribbean.

Steven Mnuchin (7:06)

Today US Forces launch what a defense official calls a precision strike against a vessel from Venezuela.

Military Official (7:14)

It's the fourth attack of its kind. In Rio, the US military has carried out a 20th strike on a boat accused of transporting drugs. Officials say this latest attack brings the total since early September to at least 115 deaths across 35 boat strikes.

Ryan Knudsen (7:29)

Then last month, the Trump administration expanded its pressure campaign to include oil tankers.

Reporter/Correspondent (7:35)

An elite Coast Guard team rappelling out of helicopters onto the deck of an oil tanker off the Venezuelan coast, executing a seizure warrant. According to Attorney General Pam Bondi, it.

Colin Eaton (7:46)

Seized a tanker last month, called the skipper. That quickly sort of showed that the administration was doing everything it could to cut off revenue streams that were supporting Nicolas Maduro and his stay in power.

Ryan Knudsen (8:04)

Secretly. In the background, the US Was also planning something more brazen, the capture and extradition of the Venezuelan president. How American oil companies are reacting is next. Okay, so what now? So this incursion happens. Maduro is in custody in New York. What is Trump's plan now, as far as we know, when it comes to Venezuela and the oil industry there?

Colin Eaton (8:43)

So President Trump sort of laid out a vision.

Narrator/News Anchor (8:45)

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.

Colin Eaton (9:05)

However, details have been scarce. It's unclear how any of this would work. But prior to Saturday, our understanding is, when we reported this that there weren't any talks between US Oil and gas companies and the Trump administration about the strikes.

Ryan Knudsen (9:25)

Chevron said in a statement Saturday that it's focused on the safety of its employees and the integrity of its assets in the country. A spokesman for ConocoPhillips said the company is monitoring developments in Venezuela and that it would be premature to speculate on any future business activities or investments. Call in. Sources in the oil industry say there'll be some reluctance to jump into Venezuela, in part because there's so much uncertainty about the country's leadership.

Colin Eaton (9:51)

The oil industry is saying that they don't know what Venezuela's government is going to look like tomorrow. They need sort of a long, stable environment to invest in. So while President Trump has sort of come out and said that these oil companies are going to invest a lot of money in Venezuela, the details are unclear and they may. We may hear some answers this week as the administration continues to talk about this with oil companies.

Ryan Knudsen (10:27)

Trump has, for now, cautiously embraced Maduro's vice president, Delsey Rodriguez, after advisors told him, she might be more open to working with U.S. companies. She's been sworn in as interim leader. Making matters more complicated is the fact that the type of oil that's in Venezuela is heavier and more expensive to pump. And when oil prices are lower like they are now, there's less of an economic incentive to invest. How much do oil companies stand to gain potentially if they do get into Venezuela?

Colin Eaton (11:01)

So I guess what they would gain is a foothold in a place with massive reserves. But they also have big considerations before they can make those investments. First of all, an investment on that scale would start seeing returns in five to ten years from now.

Ryan Knudsen (11:22)

What does this mean for Chevron, the only US Company that has continued to operate there?

Colin Eaton (11:27)

Even for Chevron, it's going to be tough to justify new investments in Venezuela at this juncture. The country is still reeling from recent instability. It might be a long time before the US and the Venezuelan government sort of mete out a method of getting these companies to reinvest in Venezuela.

Ryan Knudsen (11:59)

What's your takeaway from all this? Like, what should we make of this?

Colin Eaton (12:03)

My takeaway was the Trump administration was essentially done dealing with Maduro and the president wants the oil industry to go back. He wants to see an economic benefit from this policy. There are a lot of challenges, though, to making it work. And figuring that out will be in the realm of the oil industry going forward.

Ryan Knudsen (12:29)

On Sunday night, Trump again said the US Was calling the shots in Venezuela. He said, quote, we're in charge. That's all for today. Monday, January 5th. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting of this episode by Kejal Diaz, David Uberti and James Finnelli. Thanks for listening. See you tomorrow.

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