Assessing the Geopolitical and Financial Risks of Investing in Venezuela's Oil

The investment thesis for Venezuela's oil is no longer about market fundamentals or corporate governance. It is a geopolitical bet on a new strategic reality: the United States is managing Venezuela as a controlled asset, not democratizing it. The core shift is clear. As White House adviser Stephen Miller stated, "the United States of America is running Venezuela." Secretary of State Marco Rubio's attempt to narrow that claim to managing "the direction" of the country underscores the new playbook. The U.S. project is one of managed authoritarianism-ensuring continuity, calibrated repression, and transactional compliance, with any transition reduced to a timetable managed from Washington.

This creates a high-risk, high-reward environment where financial returns are secondary to political alignment. The U.S. has already deployed its key levers. It has captured Maduro and now directs governance through the very insiders who built the authoritarian order. A critical policy tool is the Executive Order issued on January 9, 2026, which exempts Venezuelan oil revenues held in U.S. Treasury accounts from foreign claims. This places the country's sovereign wealth under direct U.S. control, using it as a carrot and a stick. The U.S. is brokering sales of millions of barrels of stranded crude to stabilize the economy and incentivize cooperation, with a deal to sell about 50 million barrels already underway. This is not free-market trade; it is a transactional arrangement to secure influence.

The reward for investors willing to navigate this landscape is access to the world's largest proven oil reserves, now under a U.S.-brokered regime. The risk is profound and structural. It is the risk of being a player in a game where the rules are set by a foreign power with veto power. Financial returns are contingent on maintaining the political alignment that allows these sales to continue. Any deviation from Washington's "direction" could trigger the withdrawal of this lifeline, freezing assets and collapsing the entire economic model. In this setup, the oil is a strategic asset, and the investor's role is to operate within the boundaries of a managed system.

Question 2: Which companies are best positioned for this new strategic environment?

The path for foreign oil companies is now defined by a single gatekeeper: the U.S. government. Access is no longer a matter of negotiating with Caracas, but of securing licenses from Washington. The immediate frontrunners are American majors with existing operational footprints and political capital. Chevron is expected to receive an expanded Venezuela license this week, a move that would formalize its unique position as the only American oil major currently producing and exporting crude from the country. Its deep historical ties, with operations dating back to 1923, provide a critical advantage in navigating the complex, state-controlled landscape. Chevron partners with PDVSA in five onshore and offshore production projects, giving it institutional knowledge and a pre-existing joint-venture structure that other newcomers lack.

Other U.S. majors are in active talks to join this controlled access. Marathon Petroleum is in discussions with the administration to receive Venezuelan crude for its refineries, a move that would integrate the crude directly into the US refining system. Valero Energy and global traders like Glencore and Mercuria are also in the queue for licenses, indicating a broad industry interest in securing this strategic resource. The U.S. administration is framing this as a deal of national security, with President Trump asserting that companies would have "total safety, total security" to rebuild infrastructure. This political guarantee is the new currency for entry.

Yet, the legal and regulatory path remains a hurdle. The interim Venezuelan government is pushing legislation to encourage foreign investment into oil fields, but it must reconcile this with the 2001 Hydrocarbons Law that reaffirmed state control. The proposed reform aims to channel investment through the Anti-Blockade Law, which authorized 13 new contracts in 2024 and 2025. However, these contracts were awarded under a different, more adversarial U.S. policy. The new U.S.-brokered regime may require a fresh legal framework, creating a period of uncertainty even for licensed firms.

For all the industry's interest, the core challenge is development, not just access. As an ExxonMobil executive noted, the industry faces the challenge of "developing those resources" after securing them. Venezuela's oil fields have suffered from massive underinvestment for over a decade. The strategic value of the reserves is immense, but unlocking them requires a long-term capital commitment that is inherently risky in a jurisdiction where the rules are set by a foreign power. The companies best positioned are those with the political access to obtain licenses, the operational history to manage complex partnerships, and the deep pockets to fund a multi-decade development project. For now, that list is short and dominated by U.S. firms.

Question 3: What are the key catalysts and watchpoints for this investment thesis?

The geopolitical premium hinges on a series of near-term events that will prove whether the U.S.-brokered deal is a durable reality or a fleeting arrangement. The first major test is the execution and pricing of the first sale of about 50 million barrels of stranded crude. This isn't just a financial transaction; it's a signal of Washington's operational control. The volume and price realized will set the benchmark for future sales and directly impact the interim government's ability to meet its economic targets. Any deviation from expectations could undermine confidence in the entire managed system.

Simultaneously, the legislative front in Caracas is critical. The interim government's presentation of legislation to the National Assembly on January 15 aims to channel investment through the Anti-Blockade Law into new oil fields. The specifics of this reform are a key watchpoint. It must reconcile the new U.S.-brokered access with the existing Hydrocarbons Law, which reaffirmed state control. The bill's passage and its exact terms will determine the legal framework for foreign investment and signal whether the U.S. is being allowed to shape the rules from within.

Finally, the rollout of licenses to companies like Chevron and Marathon will provide concrete evidence of the new access regime. Chevron is expected to receive an expanded Venezuela license this week, a move that would formalize its unique position. For Marathon, the outcome of its discussions with the administration to receive Venezuelan crude for its refineries will be a major catalyst. The volume of crude these licensed firms begin to import will be the clearest metric of the deal's operational success and the speed at which the U.S. is integrating this strategic resource into its own energy system.