Venezuela Expropriated Billions in Oil Investments from U.S. and Multinational Companies: The U.S, Venezuela, and the World Would Benefit from Increased Oil Output and Willing Investors

     Reuters recently provided some data on the cost to U.S. and other multinational oil companies of the expropriation of their oil investments by the Chavez and Maduro administrations in Venezuela.

“In the 2000s, former President Hugo Chávez expropriated assets from several foreign oil companies, strengthening state-owned PDVSA’s control over the country's oilfields.”

     Chevron is the only U.S. company that currently operates in the country. It owns stakes of between 25% and 60% in five onshore and offshore projects in Venezuela. It exported 150,000 barrels per day in November, which dropped to 100,000 barrels per day in December.

     U.S. company ConocoPhillips lost approximately $12 billion to Chavez’s expropriation. Italian company Eni says it is owed $2.3 billion. ExxonMobil says it is owed just under $1 billion. Spanish company Repsol says it is owed about $684 million. Shell was also set to restart a project in the country, but was blocked by the Maduro government. Thus, we have at least $16 billion expropriated from these companies, with about $13 billion, or about 81% being from American companies. Thus, to say that the U.S. under Trump is invading Venezuela to steal its oil is absolutely incorrect. The opposite is true. The Venezuelan government stole billions of dollars in investment, mostly from U.S. companies. If anything, we would be stealing it back.

     Interestingly, the decline in Venezuelan oil output means that the recent action to remove Maduro is having quite muted effects on oil markets. Its total exports are about 1 million barrels per day, with most going to China. This is less than one-third of the volumes once produced for export. Those exports have already resumed or are expected to do so soon. Trump has indicated that exports to China would resume. Russia has also invested in Venezuelan oil but has received more favorable terms as an ally. Russia’s Rosneft says it invested about $5 billion in the country. Russian and Iranian experts came to revive the oil production, with lackluster results.

     China is heavily involved in the sanctions-evasion game, with China receiving about half, around 470,000 barrels per day of Venezuelan crude, which makes up about 4.5% of China’s seaborne oil imports. Many of the cargoes are undeclared and/or rebranded as originating from somewhere else. The country owes China about $10 billion, so those exports help it to pay its debt to China. China’s investment in the country’s oil sector is at a couple of billion, with another $1 billion investment expected this year, with the goal of increasing production by 60,000 barrels per day.  

     While Venezuela has a massive amount of oil in the ground, its current production is quite small, less than 1% of the global total. The graph below shows its contribution and that of fellow founding OPEC member Iran.

     It should be pointed out that Venezuelan crude is heavy and difficult to extract and deliver. It requires a diluent, usually condensate, naphtha, or natural gasoline (mostly pentanes and hexanes) to get it to flow through pipelines. The country’s production, pipeline, and refinery infrastructure is in disarray due to a lack of investment, mismanagement, and basic incompetence. The government has squandered the nation’s oil endowment, which once made it a shining example of a South American success story. People like Bernie Sanders once praised it as a modernized socialistic success but the success was really due to oil wealth and was squandered and mismanaged so poorly that the country became a failed state with nearly a third of the country’s residents fleeing for better opportunities, including to the U.S. We took them in under Biden with temporary protected status (TPS) that is now being retracted. Trump has alleged that this has led to an increase in crime, drugs, and violent gang activity in the U.S. Certainly, some of this is true, but it is hard to know how much.

     Due to the heavy crude, the cost to extract it is much higher, so it can’t compete economically with, say, Saudi Arabian crude. However, it is closer to the U.S., and most U.S. refineries are outfitted to refine such heavy crude, whether from Saudi Arabia, Canada, or Venezuela. Back in November 2025, I wrote more about Venezuela’s oil reserves.

“Marathon Petroleum (MPC) operates the largest heavy crude refinery in Louisiana at 606,000 barrels per day. The Garyville facility is positioned to capture 20% to 30% of increased Venezuelan oil exports.”

     The Gulf Coast refineries in the U.S. can handle the heavy, dense, sour, and high-sulfur Venezuelan crude. These refineries are high-capacity and have cokers and hydrocrackers, which can profitably convert the crude into valuable products like gasoline, diesel, jet fuel, asphalt, and other products.

     It should also be pointed out that it will take time to revive Venezuela’s oil sector. The 18-month timeline suggested by Trump might get production up a bit, but it would likely take years or even decades to get it back to the 3.5 million barrels per day it once produced. There are issues like outdated equipment, damaged pipelines with scale and corrosion, and required facilities, power, and expertise to get it out. Even with the billions in new investments suggested by Trump, it will take time. It will also take a stabilized political environment, and in a country full of regional factions, organized crime and narco power, various militant groups, and an illegitimate regime still clinging to power, it won’t be easy. The regime’s strong embrace of most of the world’s bad actors: Russia, Iran, Cuba, Hamas, Hezbollah, and more, the removal or mitigation of those influences could also take time. I should note that I am glad Maduro is in U.S. custody. He and his illegitimate regime are certainly criminals. Those who are not glad should be put on notice: Russia, China, Hamas, Iran, Hezbollah, Cuba, and fellow socialists around the world, including the Democratic Socialists of America (DSA), who very often choose to side with the aforementioned rogue countries. While the Venezuelan diaspora, which is a massive chunk of the country due to the regime’s oppression and incompetence, celebrates the removal of Maduro, the DSA leads protests against the U.S. and demands that Maduro be returned to power. Sanders, AOC, Mamdani, and company are once again supporting the indisputably bad actors instead. That is a damn shame. However, I can understand the distress of the risky actions by the U.S. military. Was it really necessary? I don’t know. Will it lead to a civil war and massive bloodshed in the country? I don’t know? Will it lead to reform, elections, peace, and prosperity for the country? I don’t know, but I hope so. Certainly, reviving the country’s oil sector will lead to prosperity. There remain lots of unknowns. Time will tell.  

 

References:

 

Factbox - What's the status of international oil companies in Venezuela after Maduro's capture? Reuters. January 5, 2026. Factbox - What's the status of international oil companies in Venezuela after Maduro's capture?

Factbox - China's oil investments in Venezuela. Lewis Jackson and Sam Li. Reuters. January 5, 2026. Factbox - China's oil investments in Venezuela

Marathon Petroleum to reap a windfall on Venezuela oil boom. Rich Duprey. 24/7 Wall St. January 5, 2026. Marathon Petroleum to reap a windfall on Venezuela oil boom

Not your father’s oil market: Geopolitical shocks lack impact. Spencer Jakab. Wall Street Journal. January 5, 2026. Not your father’s oil market: Geopolitical shocks lack impact