Trump Shifts Focus to Venezuelan Oil Amid Sanctions and Legal Disputes
At a recent press conference, former President Donald Trump centered his comments on Venezuela's oil resources with scant mention of the 'war on drugs.' Trump asserted that Venezuela had "stolen" oil from the United States and pledged to reclaim it, echoing sentiments expressed by Stephen Miller. However, analysts contend that the US holds no legal claim to Venezuelan oil. They point out that Venezuela's previous nationalizations do not amount to theft from the US, as American companies never owned oil or land outright, possessing only exploration concessions.
Venezuela's oil sector has a complex history, including 1943 state profits, the 1976 nationalization that led to the creation of PDVSA, and the 2007 expropriation of remaining private assets. This last act resulted in arbitration and compensation disputes, notably with ExxonMobil and ConocoPhillips. Currently, Venezuela's oil reserves are not independently audited. Its production accounts for less than 1% of global oil output and continues to be constrained by mismanagement and US sanctions. The nation's heavy sour crude is costly to extract, though potential production might rise to 4–5 million barrels per day with approximately $100 billion in investment over a decade.
Chevron operates about 25% of Venezuela's oil production, PDVSA controls around 50%, and roughly 10% each is managed through joint ventures led by Chinese and Russian firms, with 5% under European companies. Regarding sanctions, the US had previously banned Venezuelan oil imports. While the Biden administration eased some restrictions to facilitate political transition, President Trump reinstated sanctions. Despite these challenges, Chevron maintained operations at reduced capacity, with royalties redirected toward operating costs and debt servicing rather than supporting President Maduro's regime.
