Venezuela’s Oil: Why Lower Energy Prices Aren’t Immediate

With the capture of Venezuelan president Maduro and the taking over of the South American country so many questions are being asked and so-far not a lot of answers.

Here, perhaps might be a few potential outcomes. Will the citizens of Venezuelan enjoy a more prosperous future? Likely so. Will narcotics traffic to the U.S. slow dramatically? Likely so.

Could tourism increase there? Absolutely. Perhaps all quite positive things.

Will the massive proven oil reserves Venezuela holds underground reduce the price of energy for consumers? That question isn’t as simple and needs to be drilled down upon.

The reality of Venezuela’s reserves

There’s no argument when it comes to the amount of black gold in the South American country, it’s estimated to be one of the largest in the world. At first glance one would think if the U.S. will in fact be running the country, one of the most important things is to tap the natural resources it holds, which in-turn could not only supply the global market with additional energy but also share the wealth with the citizens of Venezuela. Domestic wealth which has certainly been lacking.

What U.S. oil companies may find on the ground

In the coming weeks, U.S. energy companies will be offered a first-hand look at exactly what condition the Venezuelan oil industry is in. During its hey-day in the late 1990’s Venezuela was pumping approximately 3.5 million barrels per day, which certainly made them a global player in the energy markets. That figure started decreasing thereafter, even prior to the sanctions imposed by the U.S. in 2019. By the end of 2025 Venezuelan daily output slumped to as low as 1 million barrels.

There is a very strong possibility that what the U.S. oil companies find there won’t be good. Decades of neglect and lack of investment has likely left the industry in such a poor state that not every oil company will want to set up business there. In fact, with-out subsidies, the interest might be lacking completely. With WTI trading in the mid to upper 50’s many U.S. oil companies aren’t exactly printing money and with the prospect of what would require a massive investment to increase production just 1 million barrels over the next couple of years may not seem that appealing at all.

The bottom line

Time will tell as to what amount of interest develops for expanding Venezuela’s oil industry, but what seems quite clear is that dramatically lower prices at the pump are likely years off.