Trump announced that the U.S. would take control of Venezuela and allow American oil giants to enter Venezuela—what does this mean? What crises will Venezuela face next?

Some answers are truly masterclasses in wishful thinking: questions about oil can’t even be properly addressed by AI—just subjective opinions, with no evidence or citations whatsoever. Taking control of Venezuela is the opening gambit; only if this coordination with South Korea yields results can it be considered a modest draw. This is an exceptionally professional and incisive question. The answer is: the U.S. not only has the capacity to handle Venezuelan oil—it possesses one of the world’s few industrial systems most eager for—and best suited to—processing Venezuela’s heavy crude: the massive refining complex along the U.S. Gulf Coast. Regarding the characteristics of ‘heavy crude’ and U.S. reception capacity, we can analyze the issue from three angles: technological complementarity, infrastructure status, and strategic bottlenecks. 1. Technological Level: Perfect Complementarity (“Light Meets Heavy”) Many hold the misconception that, as the world’s top oil producer, the U.S. no longer needs Venezuelan oil. In fact, the opposite is true: ・U.S. oil is too “light”: The shale revolution has yielded mostly light, low-sulfur crude (Light Sweet Crude). ・The U.S. refining system is “heavy-hungry”: The vast Gulf Coast refining infrastructure—especially in Texas and Louisiana—was built over decades at a cost of thousands of billions of dollars, specifically designed to process heavy, high-sulfur crude (Heavy Sour Crude) from Venezuela, Mexico, and Canada. ・Current reality: Due to prior sanctions on Venezuela, these refineries have been forced to import heavy crude at premium prices from Canada—or operate below optimal efficiency. A resumption of direct Venezuelan heavy crude supply would be nothing short of “rain after a long drought” for U.S. refiners, dramatically improving both refining margins and operational efficiency. 2. The Real Obstacle to “Full Reception”: Lies Not in the U.S., But in Venezuela Although the U.S. has the capacity to “digest” this oil, Venezuela currently lacks the ability to “serve it up.” ・Production collapse: Venezuela’s oil output has plummeted from over 3 million barrels per day at its peak to under 1 million bpd today. The U.S. refining appetite is enormous—the country’s current residual output couldn’t even fill a fraction of a single U.S. refinery. ・Infrastructure collapse: Venezuelan heavy crude is as viscous as asphalt; its extraction and transport require specific diluents (often previously supplied by the U.S.). Decades of sanctions and mismanagement have left pipelines, pumping stations, and upgraders largely rusted and nonfunctional. ・“Invest First, Produce Later”: For the U.S. to achieve full reception, American oil majors (e.g., Chevron, ExxonMobil) must first re-enter Venezuela—with capital and technology—to rehabilitate this decaying infrastructure. 3. Why Rubio’s “Takeover” Proposal Is So Significant to the Energy Industry This explains why the U.S. is resorting to such an extreme model as “governorship” or “takeover”: ・Forced reallocation: Venezuelan crude isn’t just heavy—it’s also high in sulfur. Previously, large volumes were sold cheaply to independent Chinese refiners (“teapot refiners”) equipped to handle it. The U.S. strategy may now aim to sever this eastward supply chain and forcibly redirect Venezuela’s remaining output back to the Gulf Coast. ・Debt-offset model: Trump’s reference to “using oil profits to repay the U.S.” refers precisely to U.S. companies entering Venezuela, repairing facilities, extracting heavy crude, shipping it to U.S. refineries—and retaining the resulting profits within the U.S. financial system.

Microcosm of Macro Trends | U.S.–Venezuela Relations Barometer (III): U.S. Oil Companies to Return to Venezuela

1. Accelerating Progress Chevron is steadily increasing production but remains cautious about expanding capacity. It is currently the only major U.S. oil company operating in Venezuela under a special U.S. government license—and thus the firm most likely to rapidly scale up output for near-term returns. At least 11 tankers chartered by Chevron are scheduled to arrive this month at José and Puerto La Guaira—ports controlled by the Venezuelan government—marking the highest number since October last year. All crude loaded onto these 11 vessels will be shipped to U.S. domestic refiners, including Valero Energy (VLO), Phillips 66 (PSX), and Marathon Petroleum (MPC). Over the past three years, Chevron has consistently increased crude output—but further capacity expansion entails substantial costs. Although such investments are largely concentrated in infrastructure—a segment sitting at the lower end of the global oil industry’s cost curve—they still require a more robust financial framework to ensure competitive returns for the company. As the sole U.S. enterprise currently operating in Venezuela under special license, Chevron’s Vice Chairman Mark Nelson told Trump last Friday that upgrading existing facilities could boost output by 50%—from its current ~240,000 barrels per day—to roughly 360,000 bpd—within two years. U.S. Treasury Secretary Scott Bessent stated on the 11th to Reuters that Washington is moving to lift some sanctions against Caracas, which would help stabilize Venezuela’s economy and facilitate its oil sales—bringing urgently needed revenue to the country. Yet Carlos Bellorín, analyst at consultancy Veringis, noted that additional sanctions must be lifted before oil companies can meaningfully cooperate with Venezuela’s state-owned oil firm PDVSA—or before key service providers like Schlumberger and Halliburton can bring in critical drilling equipment. Removing these restrictions could unlock investment in “easily recoverable crude,” including funding to restart recently abandoned wells and repair foundational infrastructure—from pipelines to port facilities. Additionally, Repsol CEO Josu Jon Imaz stated at a recent meeting that his company could triple its current 45,000-bpd output within two to three years. Yet these remain relatively modest increments: overall production increases over the next year may reach at most 200,000 bpd—and numerous other obstacles persist. 2. Capital Recovery ExxonMobil and ConocoPhillips emphasize recovering historical claims—leading to a negotiation deadlock with the U.S. government. In the early 2000s, ExxonMobil, ConocoPhillips, Halliburton, Schlumberger, Weatherford International, and Baker Hughes all operated in Venezuela—before withdrawing following Hugo Chávez’s mandatory requirement that they transfer majority equity stakes to PDVSA. ConocoPhillips and ExxonMobil have filed international arbitration claims over Chávez’s expropriation, seeking $12 billion and $1.65 billion respectively. During earlier lobbying efforts, the Trump administration indicated that U.S. oil firms would need to front the investment capital required to rebuild Venezuela’s oil industry—as a prerequisite for eventually recovering their expropriation awards. For these U.S. oil companies that suffered losses, returning to Venezuela requires convincing shareholders that the new regime will not again impose forced equity transfers or nationalization.

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