After the US captured Venezuela’s president in early 2026, Donald Trump vowed to “unleash” the country’s oil and urged companies to invest US$100 billion to exploit it. Big Oil, however, has been cool to the idea—describing Venezuela as “uninvestible” and prompting a rare public rebuke from Trump when ExxonMobil echoed that view.
Trump’s image of oil companies as bold risk-takers—willing to gamble everything to secure more crude—belongs to a different era. Modern major oil firms prioritize certainty and predictable returns. They favor investments in areas they understand well, such as plastics and petrochemicals, and avoid uncertain, politically fraught projects like Venezuelan development or the shifting economics of the energy transition.
Research on international oil industry strategy shows that large oil companies base planning on long-term, stable production pathways. South America plays a marginal role in these plans. Instead, firms concentrate on two main arenas: US shale and petrochemical expansion in Asia. Low-cost shale provides competitive feedstock for refineries, while Asia’s manufacturing growth fuels demand for petrochemicals and plastics—markets that promise reliable, long-term profits even as demand for transport fuels softens.
Venezuela’s vast crude reserves do not automatically translate into attractive commercial opportunities. Not all oil is the same: geological differences and required refining technologies determine what products can be made from a barrel of crude. Though Venezuela produces more crude than it consumes, it imports fuels and petrochemicals because it lacks the refinery capacity and technical capability to convert its heavy crude into usable products. Advanced refining and services technologies remain concentrated in international firms; without their participation, Venezuelan crude is often unsuitable for global refineries.
This technological and capability gap means reserve size is a poor predictor of whether a country imports or exports finished oil products. Big Oil could be persuaded to invest in Venezuela, but typically only with strong guarantees that shift commercial and political risk onto the state or taxpayers. Using public funds to underwrite private gains is a questionable choice, especially when those resources might better support clean energy development.
The problem is not that oil companies take too many risks, but that they avoid investing in areas society most needs—chiefly green energy. Research indicates that as oil majors have retreated from low-carbon investments, they have increased spending on high-emission petrochemicals and plastics. Redirecting corporate capital toward decarbonization will require more than exhortation: it needs coordinated policy measures to change incentives.
Addressing this mismatch calls for supranational coordination to raise the effective costs of producing fossil fuels and to limit new oil infrastructure—measures aimed at steering investment toward low-carbon alternatives. That approach is very different from attempting to “unleash” a nation’s oil supply by political fiat.
Damian Tobin is lecturer in international business, University College Cork
This article is republished from The Conversation under a Creative Commons license.
