US moves to control Venezuelan oil with investments exceeding $100 billion as China and India engage in evolving energy ties

Following the capture of Nicolás Maduro, the Trump administration announced plans to revive Venezuela’s petroleum industry through $100 billion in investments aimed at rebuilding severely degraded infrastructure. Venezuela’s oil output has plummeted despite holding the world’s largest proven reserves, largely due to decades of mismanagement, underinvestment, and sanctions. PDVSA, the state oil company, is unable to meet international standards owing to corruption and inefficiency, prompting increased US openness to foreign participation. The Department of the Treasury issued broad licenses to expand activities of US companies in refining, selling, and extracting Venezuelan crude. Chevron remains the only major US firm actively operating in Venezuela, with production approximating 250,000 barrels per day and plans to increase output by 50% in the next 18 to 24 months, pending regulatory approval.

Trump declared China and India as welcome partners in Venezuelan oil, highlighting a new accord for India to purchase Venezuelan crude instead of Iranian oil. China’s imports of Venezuela’s heavy sour crude, averaging 400,000 barrels per day in 2025, have sharply declined following US naval interdictions, with shipments now largely redirected to the US and Europe. While China continues to secure alternative sources such as Russia and Iran, its long-term petroleum demand is projected to decline due to accelerated adoption of electric vehicles.

Logistical pressures remain as Gulf Coast refiners adjust to heavy Venezuelan crude influx amid competitive pricing against Canadian oilsands crude. Refineries with the capacity to process up to 250,000 barrels per day of Venezuelan oil face challenges in absorbing rising volumes, leading to storage build-ups and discounted prices. Despite US intentions to dominate Venezuelan oil production, the high costs of extraction—estimated at $30 per barrel—and environmental constraints linked to sulfur content and carbon emissions will likely delay a substantial supply increase for years.

Beyond oil, Venezuela’s extensive deposits of critical minerals positioned near US supply chain interests could further influence US strategic resource acquisition policies amid Sino-American rivalry. The country’s opening to foreign energy firms, tax reductions, and easing of sanctions represent foundational shifts but hinge on prolonged political stability and substantial capital commitments.