Trump’s planned revival of Venezuela’s oil industry could cost the United States $100 billion.

Over the weekend, U.S. forces arrested Venezuelan President Nicolas Maduro is accused of drug trafficking, with Trump saying the United States would “run” the country and take over the country’s nationalized oil reserves.

“American dominance in the Western Hemisphere will never be challenged again. It will not happen,” Trump said Saturday, while explicitly endorsing the “Donroe Doctrine,” a social media meme/portmanteau that describes the retro-nostalgic version of America. imperial authority was increasingly manifested during his second term. THE The Monroe Doctrine meets the Donald.

The move follows a series of deadly strikes on Venezuelan boats believed to be carrying drugs, attacks widely considered illegal. United Nations Secretary-General António Guterres, the organization’s top official, called Trump’s ouster of Maduro a violation of the U.N. charter.

Home to the world’s largest oil reserves, Venezuela reached its peak production in the 1970s, producing more than 3.5 million barrels of oil per dayalthough production has declined significantly to around 1 million barrels per day. Analysts have high hopes that oil companies entering Venezuela will be able to re-exploit the country’s black gold. JPMorgan predicted that with control of Venezuelan oil, the United States could hold 30% of world oil reserves. Other analysts said the country could double or triple its current productionbringing it back quite quickly to its peaks of 50 years ago.

But experts warn that the path to dominance, at least where oil is concerned, will be an uphill battle after decades of mismanagement and sanctions. State-owned oil giant Petróleos de Venezuela SA (PDVSA) collapsed in the mid-2010s following the loss of foreign financial support, as well as skilled workers to maintain the pipelines. In 2017, the first Trump administration escalation of oil sanctions on Venezuela, limiting the country’s access to American markets.

Small war, big questions

Efforts by oil companies to increase production, including rebuilding infrastructure, would take about a decade, according to Helima Croft, head of global commodities strategy at RBC Capital Markets. She wrote in a note to investors Saturday that oil executives estimate the efforts would cost $10 billion a year, bringing total investments over the next 10 years to about $100 billion.

Part of these high reconstruction costs also results from the need to extract and refine heavy crude oil, which makes up about 75 percent of Venezuela’s reserves, most of which is in the Orinoco belt. Venezuela’s erstwhile oil boom was also due to the discovery of light crude oil in Venezuela’s western oil fields, which were easy to access and therefore quickly depleted. Even though heavy crude oil is what mostly drilling for todayits viscous consistency and high levels of metals and sulfur mean that extracting and refining this product is significantly more expensive than its light crude counterpart.

The massive commitment to restoring Venezuela’s oil industry to its peak means oil prices are unlikely to change anytime soon, said Miguel Tinker Salas, professor emeritus of history at Paloma College and author of The lasting legacy: oil, culture and society in Venezuela. It’s a big blow for Trump.”drill baby, drill» and, according to the historian, the president’s hope of gaining momentum as the midterm elections approach.

“The idea that Venezuela has the largest oil reserves in the world – 303 billion barrels of oil [in reserve]– could be a stimulus to try to lower the price of oil, potentially for its own electoral purposes,” Tinker Salas said. Fortune. “Although [Trump] He is sorely mistaken if he thinks Venezuelan oil will come online tomorrow and impact oil prices before the election.”

Several other analysts see more than a small medium-term maneuver behind the US strike against Venezuela, given the current situation. rout out of year that the Republicans suffered in 2025 and Trump’s dismal polls. Macquarie’s global analysts Viktor Shvets And Kyle Liu noted that their 2026 outlook included “starting a little war” as a policy Republicans could pursue to avoid a midterm “collapse.” Maduro’s capture is about oil and the Monroe Doctrine, they added, but it also reinforces the Republican Party’s “tough on crime and drugs” image.

Elsewhere, UBS chief economist Paul Donovan argued in a Monday podcast that perceptions of “affordability” appear to have shaped US administration policy in recent weeks. He noted two tariff decisions in particular: a delay on a furniture tax and a reduction in planned fees for tariffs on Italian pasta.

“The weekend’s action in Venezuela also raises tax questions,” he wrote. “It’s unclear exactly how the United States intends to ‘rule’ Venezuela, but military adventures come at a fiscal cost. Despite the noise from social media warriors, geopolitical considerations are likely to be less of a concern to investors.”

Risks of political instability

The factors influencing U.S. oil companies go beyond just the infrastructural challenges plaguing the industry in Venezuela. According to RBC Capital Markets’ Croft, increasing oil production will depend on companies’ confidence in the security of their facility in Venezuela. It starts with knowing who will lead the country in the future.

This individual is unlikely to be a Nobel Peace Prize winner and opposition leader. Maria Corina Machadowhich Trump said lack of support to fulfill the role; nor will it be Edmundo González, who ran against Maduro in the 2024 elections, which were considered the big winner of the election. González is in voluntary exile in Spain. Delcy Rodriguez, Maduro’s vice president, was sworn in as Venezuela’s interim president on Monday.

“We don’t really know who is in charge, who is going to lead Venezuela,” Croft said. told CNBC Monday.

The United States will also need to learn from its past efforts to strengthen its authority. in the oil-rich countries of Iraq and Libya. Both efforts included attempts to remove the countries’ respective leaders, which led to political collapse and civil unrest.

“We thought that Libya would experience an easy turnaround, after[former Libyan Prime Minister Muammar] Gaddafi,” Croft said. “So the question is: what is our model for a rapid recovery of an oil sector that has suffered decades of decline and mismanagement?”

Tinker Salas argued that other factors, including improved technology for extracting low-oil crude, could speed up production, but until there is evidence that businesses can thrive in Venezuela, there will likely be little effort to step up drilling.

“I don’t think any major American company wants to invest without a series of guarantees, because these are billion-dollar investments,” Tinker Salas said. “It’s a long-term investment, not a short-term one.”

Macquarie’s Shvets and Liu added an ominous warning for the long term of US foreign policy, writing that it was “another nail in the coffin of war.” [the] a rules-based world order,” marginalizing the UN “like the League of Nations of the 1930s.” The League of Nations was the precursor to the United Nations and is famous among historians for its formation after the wreck of World War I and its almost immediate failure to prevent the rise of authoritarianism in the 1930s that paved the way for World War II.

It could also indicate that the Church Committee’s rules may be “outdated”, Macquarie analysts wrote, referring to regulations in place since 1975 to combat abuses revealed by intelligence during the Vietnam period. After all, the CIA would have played an essential role in ensuring the success of this military action in Venezuela.

On the one hand, a strong Republican performance in the midterms would strengthen the “unitary system of governance,” but Macquarie argued that it would likely further erode the “few remaining semi-independent agencies (primarily the Fed).” Right on cue, a new Federal Reserve chairman is appointed should be selected in the coming days.