Oil is at the heart of Donald Trump’s Venezuela gamble. Within a day of the US operation that ousted President Nicolas Maduro, Trump made clear his top priority: reviving the country’s oil industry.
“We’re going to join our very large American oil companies—the biggest in the world—to spend billions of dollars, fix the badly broken oil infrastructure, and start making money for the country,” he said at a press conference on Saturday.
He has since said Venezuela will soon hand over 30 to 50 million barrels of crude oil to the US government – worth about £2.1 billion – and the US has seized two sanctioned tankers.
Moreover, he asserted that the expansion of US operations in Venezuela could commence within less than 18 months.
Big promises. But how realistic are they?
current situation
In the short term, it is not clear where the 30 to 50 million barrels of oil will come from. The US blockade of Venezuelan oil exports has put a halt to the country’s oil industry.
Data from Kpler, a global real-time data and analytics provider, shows Venezuela currently has about 40 million barrels of oil in storage. About half of them are on ships that either managed to get through the blockade or are sailing away from Venezuelan shores.
Sky News has mapped about 30 US-sanctioned ships sitting near the Venezuelan coastline.
Some ships are able to pass freely through the blockade – and they are American. Joe Biden granted a waiver from sanctions to US oil company Chevron, which produces 20% of Venezuelan oil that the US imports.
Sky News has identified 16 tankers that have a history of transporting Venezuelan crude oil to the US for processing. Four of these ships have arrived in Venezuela from the US since January 6, while two others are still en route.
The two ships that departed after Maduro’s ousting from power on January 3 are part of this collection.
The Minerva Astra, a tanker sailing under the Greek flag, departed Pascagoula, Mississippi, eight hours after Maduro’s seizure. Satellite imagery from January 5 captured the ship moving past Cuba.
The tanker Minerva Astra began its journey from Cuba on January 5. Source: Copernicus
In the longer term, even if the blockade is lifted, experts told Sky News the ambition to turn the industry around in 18 months is unrealistic.
This is partly because decades of underinvestment and corruption have left the country’s oil infrastructure in disrepair.
“It’s going to be expensive, slow, and difficult,” says George Lyon, vice president of Rystad Energy.
In the best-case scenario, assuming quick government stability, Rystad estimates it would take five to seven years to double production to two million barrels per day— a million less than the peak in the early 2000s. It will cost at least £80bn.
“I think it might be a little foolish to think that we can go back to these days of two million, three million-plus because the infrastructure is no longer there,” says Barney Grey, global crude editor at Independent Commodity Intelligence Services.
“To change everything would take us back to those days at what would probably be an unimaginable cost that large private American companies are unwilling to bear.”
extraction
Signs of disrepair are visible at every stage of the supply chain. Let’s begin by examining the rigs used for drilling new wells.
Data from the Baker Hughes Rig Count Report indicates that Venezuela had only two operational rigs in 2025. The number is up in single digits from 2019, when there were 24. Ten years ago, there were 67.
Despite the country’s high oil extraction capacity, its processing capacity remains limited. This is partly due to the challenges Venezuelan oil presents even before it leaves the ground.
The oil produced from vast reserves in the Orinoco Belt region is a type of “extra heavy” crude oil, which requires pre-processing to prepare it for refining.
“The key thing is to build costly, sophisticated upgrade units,” says Clay Siegel, senior fellow at the Center for Strategic and International Studies.
Mr Siegel says there are currently four upgrading units in the country, which are vital in making the county’s extra-heavy crude more manageable and ready for export. But only one is operational.
The only working unit was built and operated by the American oil company Chevron, in a joint venture with the state oil company.
“A big part of the puzzle is refurbishing and perhaps even building new sophisticated upgraders. Such an initiative would cost tens of billions of dollars and require relatively long time scales,” says Mr Siegel.
Venezuela’s oil production remains in storage.
The blockade and US sanctions have kept much of Venezuela’s oil production in storage.
Analytics company Kpler estimated that 22 million barrels of oil were in storage containers nationwide in December, most of which were in the Jos Industrial Complex.
Venezuela has enough storage units on land to fill about 48 million barrels, but not all of that possible space is functional.
Kairos, a company that uses satellite image analysis to track storage capacity, monitors about 98% of all storage units in Venezuela. It found that about a third of the tanks appeared unused or unusable.
“On paper, it looks like there is still some spare capacity,” says Antoine Half, chief analyst and co-founder of Kairos. “In practice, that’s probably not the case.”
Satellite image analysis reveals that unfilled storage units are rusted, old, and unusable.
This is evident in the Puerto Miranda storage facility. The white caps in the 2022 satellite imagery indicate operating tanks, with their tops rising and falling with oil volume. By 2025, most of them will be a different colour than white. They are black – showing dirt – or orange – indicating rust.
“If you don’t use the tank and don’t do proper maintenance, it rusts rapidly. And then if you use a rusty tank, you have problems with leakage but also contamination of the crude oil, which creates all kinds of problems,” Mr Half says.
Another measure of the decline of Venezuelan industry is pollution. The thick, tar-rich oil found in Venezuela is considered “dirty” because it contains a high concentration of carbon.
Leaking pipes and infrastructure are also responsible for Venezuelan oil’s particularly poor environmental record.
This was more than double the 4 kg of methane emissions per barrel produced in Algeria, the next biggest polluter among the top 20 major oil-producing countries.
possibilities
Dealing with the challenges posed by Venezuela’s dilapidated infrastructure will require significant capital, and the U.S. oil companies will need serious guarantees about the legality and safety of contracts before they can make that kind of investment.
With the US blockade still in place and the country’s political future still uncertain, how willing will international investors be to invest in Venezuela?
“Currently the answer is not very good,” says Barney Grey from ICIS. “The Venezuelan government is unstable, and corruption is rampant, which means we are not meeting some of the initial investment criteria.”
“They need to make significant progress before we can even remotely demonstrate the economics.”
Data and Forensics The team is a multi-skilled unit dedicated to delivering transparent journalism from Sky News. We collect, analyse, and visualise data to create data-driven stories. We combine traditional reporting skills with the advanced analysis of satellite images, social media, and other open-source information. Through multimedia storytelling, our goal is to better understand the world while also showing how our journalism is done.
