In a historic and highly controversial military operation, U.S. forces captured Venezuelan President Nicolás Maduro.
The U.S. government described the operation as part of a broader strategy to strengthen American power and stabilize a nation plagued by economic collapse, political turmoil, and humanitarian crises.
The mission's key objective, however, has been oil, with Venezuela boasting the world's largest proven reserves at 303.2 billion barrels.
US President Donald Trump plans to open up the South American country's vast state-controlled oil reserves to American oil companies, which he said would help rebuild Venezuela's energy infrastructure.
But despite holding the world's largest proven oil reserves, Venezuela's current production is only a small fraction of its potential. Its output has actually collapsed over the past two decades. Back in the 1990s, the country was producing about 3.5 million barrels per day, which has now fallen to under a million.
According to the International Energy Agency, the country produced an estimated 860,000 barrels per day in November. This is due to mismanagement, sanctions, lack of investment, and infrastructure decay.
And the market has reacted sharply to this uncertainty over future Venezuelan production. WTI crude oil has dropped below $57 a barrel, and Bred crude under $61 a barrel.
Still, the country has enormous potential. The problem is that its oil fields, pipelines, refineries, power grid, and export terminals are severely deteriorated. Not to mention, much of the remaining crude is heavy and sour, requiring specialized facilities and blending before it can be refined, which is a costly and technically challenging process.
But according to Baron Lamarre of Index Exchange, that's not the entire or even the main problem.
"Rebuilding Venezuela's oil industry is often framed as an infrastructure problem, but that dramatically understates the challenge," said Lamarre. Repairing oil wells, processing plants, and power supply are, in fact, "the easier problems to solve," he added.
Lamarre has spent over two decades in the Oil & Gas industry, striking deals with leading industry names such as Shell, ExxonMobil, Chevron, BP, Mitsubishi, Itochu, Vitol, PetroChina, and many more.
He's currently focused on tokenizing real-world energy assets, starting with oil through LITRO. The platform is transforming oil trading into a more transparent, liquid, and accessible digital marketplace. Driven by a belief in financial inclusion through technology, Baron aims to democratize access to the global energy economy.
According to Baron, Venezuela's oil sector could technically be quickly rebuilt between 3–5 years, costing roughly $70–100 billion. It can even be "modernized to return to pre-sanctions production levels of around 3 million barrels per day, assuming access to capital, technology, and stable operating conditions."
The U.S. oil companies, he noted, have the expertise to do that efficiently, and the likes of Chevron are already operating in the country, which means they know the terrain perfectly well.
"The biggest challenge, however, is not technical—it is environmental, human, and political," said Baron.
He pointed out the severe environmental damage around Lake Maracaibo and along parts of the Orinoco Belt. "Decades of oil spills, corroded infrastructure, and abandoned facilities mean that large-scale environmental remediation would require long-term investment, strict standards, and sustained oversight," which would take several decades and billions of dollars, with no immediate financial return.
Rebuilding Venezuela's oil industry further requires rebuilding local human capital in order to sustainably run and maintain these facilities, which "is not something private U.S. companies can do on a short investment horizon," said Baron.
On top of it all, political continuity and certainty present a major risk.
The US has previously undertaken similar operations in Germany, Japan, and Iraq, which shows that military control isn't enough; outcomes depend on political continuity and institutional stability.
The solution is the US government seeking a durable political framework within Venezuela first, one that survives election cycles, before asking companies to inject massive amounts of capital, said Barron. "Without that, the risk profile overwhelms the opportunity."
So, until human and political reality is addressed, large-scale reinvestment will remain cautious, incremental, and conditional, he added.
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