Why US President Donald Trump’s Venezuela oil strategy may not shake markets immediately

US President Donald Trump’s plan to take control of Venezuela’s oil industry and invite American companies to revive it following the capture of President Nicolas Maduro is unlikely to have an immediate effect on global oil prices. While the proposal has drawn attention due to Venezuela’s vast oil wealth, analysts say the country’s damaged infrastructure and unstable political environment mean any meaningful production boost would take years.

Venezuela’s oil sector has suffered from decades of mismanagement, corruption and international sanctions. Although some analysts believe output could eventually double or even triple from its current level of about 1.1 million barrels per day, such gains will not come quickly.

“While many are reporting Venezuela’s oil infrastructure was unharmed by US military actions, it has been decaying for many, many years and will take time to rebuild,” said Patrick De Haan, lead petroleum analyst at GasBuddy. Experts agree that large-scale investment will be required before production can approach historic levels.

American energy firms are also expected to wait for political clarity. The situation remains uncertain, with Trump claiming US control while Venezuela’s vice president initially argued for Maduro’s return before being ordered by the high court to assume the role of interim president.

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Long-Term Optimism, Not Instant Results

Phil Flynn, senior market analyst at Price Futures Group, said optimism could grow if US control appears stable. “That could cement lower prices for the longer term,” he noted, adding that increased Venezuelan output could put pressure on Russia. Still, oil markets were closed over the weekend, and no major price movement is expected when trading resumes due to existing global supply surpluses and OPEC production limits.

Huge Reserves, Low Output

Venezuela holds the world’s largest proven crude reserves, about 303 billion barrels, roughly 17 per cent of global reserves yet produces less than 1 per cent of the world’s oil. Production has fallen sharply from 3.5 million barrels per day in 1999.

Chevron remains the only major US firm with significant operations, producing around 250,000 barrels daily through joint ventures with PDVSA.

Political and Legal Hurdles Remain

Experts say attracting foreign investment hinges on political stability and contract security. “The issue is not just infrastructure,” said Francisco Monaldi of Rice University, estimating that reaching four million barrels per day would take a decade and around $100 billion.

Legal questions also loom. Columbia University law professor Matthew Waxman warned that control over Venezuela’s resources could raise international law concerns.

While Venezuela’s oil potential is immense, analysts agree that rebuilding the industry will be a slow, complex process—one unlikely to reshape oil markets in the near future.