US President Donald Trump's plan to take control of Venezuela's vast oil reserves has raised eyebrows among experts, who warn that the move may not yield the expected returns and could even sink into a financial quagmire.
The Trump administration is attempting to seize $3 billion worth of crude oil stuck in tankers and storage facilities, claiming it will be "turned over" to the US before being sold on the international market. However, the administration's ambitions go far beyond that initial move, with plans to control all of Venezuela's oil sales indefinitely.
Experts say, however, that the road ahead is fraught with challenges. The country's aging oil infrastructure requires a whopping $183 billion to be restored to its former output levels, with some estimates suggesting it could take until 2040 to achieve. The process also involves significant investment in extracting the country's dense and expensive-to-produce heavy crude.
"The total spending required to return Venezuela's output to 2m barrels a day could hit highs of $183bn," noted analysts at global consultancy Rystad Energy. "In order to make this scenario a possibility, at least 25% of this amount – $30bn-$35bn – would have to be committed in the first two years."
Furthermore, US oil companies are wary about investing in Venezuela due to its tumultuous politics and perceived lack of stability under President Trump's rule. "No one wants to go in there when a random fucking tweet can change the entire foreign policy of the country," one private equity energy investor told the Financial Times.
In fact, even if production is somehow revived, it may not be enough to offset the growing supply glut and declining demand for oil. Climate action could usher in a permanent reduction in global demand, with renewables becoming increasingly viable alternatives to fossil fuels.
As such, the move by Trump's administration may end up being more of a scramble for stranded assets than a smart investment strategy. Economists warn that investing in Venezuela at this juncture would be akin to trying to hold water in one's hands – it's only a matter of time before the returns become unsustainable.
The Trump administration is attempting to seize $3 billion worth of crude oil stuck in tankers and storage facilities, claiming it will be "turned over" to the US before being sold on the international market. However, the administration's ambitions go far beyond that initial move, with plans to control all of Venezuela's oil sales indefinitely.
Experts say, however, that the road ahead is fraught with challenges. The country's aging oil infrastructure requires a whopping $183 billion to be restored to its former output levels, with some estimates suggesting it could take until 2040 to achieve. The process also involves significant investment in extracting the country's dense and expensive-to-produce heavy crude.
"The total spending required to return Venezuela's output to 2m barrels a day could hit highs of $183bn," noted analysts at global consultancy Rystad Energy. "In order to make this scenario a possibility, at least 25% of this amount – $30bn-$35bn – would have to be committed in the first two years."
Furthermore, US oil companies are wary about investing in Venezuela due to its tumultuous politics and perceived lack of stability under President Trump's rule. "No one wants to go in there when a random fucking tweet can change the entire foreign policy of the country," one private equity energy investor told the Financial Times.
In fact, even if production is somehow revived, it may not be enough to offset the growing supply glut and declining demand for oil. Climate action could usher in a permanent reduction in global demand, with renewables becoming increasingly viable alternatives to fossil fuels.
As such, the move by Trump's administration may end up being more of a scramble for stranded assets than a smart investment strategy. Economists warn that investing in Venezuela at this juncture would be akin to trying to hold water in one's hands – it's only a matter of time before the returns become unsustainable.
I mean, can you blame them? The US is really grasping at straws with this whole Venezuela thing. $3 billion worth of oil stuck in tankers and storage facilities? That's like finding a needle in a haystack! And now they're planning to spend a whopping $183 billion to restore the country's oil output? That's just crazy talk! 
, and renewables are becoming increasingly viable alternatives.
. Investing in Venezuela at this juncture would be like playing a high-stakes game of Russian roulette – it's only a matter of time before the returns become unsustainable 
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. It's not about helping the country or its people, but rather about getting their hands on some serious cash 
They're talking about sinking into a financial quagmire and wasting billions of dollars. Meanwhile, climate change is a real thing and we need to be investing in renewables, not digging ourselves deeper into debt 
. Mark my words, this whole plan is just a scam 
... Climate change is becoming a bigger deal by the day 
and renewables are looking more viable all the time 
... I'm not saying Trump doesn't know what he's doing, but this whole Venezuela thing just seems like a gamble 
to me... What do you guys think about it? Should the US be investing in Venezuela or should they just focus on their own oil problems?
the us economy is already struggling so to add venezuela's debt on top of that is just insane 
Trump thinks he can just swoop in and take control of Venezuela's oil reserves without thinking about the logistics? It's like, have you seen those tankers stuck in storage facilities for years? And now they're expecting to get $3 billion worth of crude oil just handed over? Please. 
The US is already struggling with its own energy crisis, and Trump wants to take on Venezuela too? 
What's next, taking on the entire Middle East?
maybe it'll pay off or maybe it won't lol 
. Plus, think of all the jobs created by getting all that oil out on the market 
! The US will be laughing all the way to the bank 
.
the oil industry is gonna have to adapt fast or die i feel bad for venezuela tho they really need the cash but 183 billion is a huge ask 
and i was watching this news about trump wanting control of venezuela's oil reserves and i'm like... wth is he even thinking? 
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, I mean interesting how Trump's plan is gonna sink into a financial quagmire like that! $183 billion to restore oil infrastructure? That's just crazy talk 
25% of that in the first two years? Good luck with that 
Climate action is a real thing now, renewables are on the rise 
. With the country's aging infrastructure and the shift towards renewable energy, it feels like a long shot 
. I feel like he's stuck in the Stone Age when it comes to sustainable energy.
. What if they fail to turn over those oil reserves? Who's going to pay for that? The US taxpayers, probably