Ve Venezuela oil sector Loading... : Investor Sentiment and Bull/Bear Views

Trump says the US picked up 50 million barrels of Venezuelan oil and will sell at market price, relations with Venezuela are good, and Venezuela has tremendous oil reserves and can be hot again and make more money with the US. This is positive for Venezuela's oil sector.

Haass says the principal US objective in Venezuela is to secure access for American oil companies to Venezuela's oil sector, not regime change or democracy promotion. He notes the sector is large, roughly 17-18% of world supply, but much is hard to access, lower-quality crude, and in terrible disrepair. He also warns that Venezuelan nationalism could later challenge a generous oil-sharing arrangement with American companies, making this a policy-driven setup to monitor rather than a clean near-term trade.

Trump is seeking to rebuild Venezuela's oil sector, with a White House meeting of nearly 20 oil executives to discuss more than $100 billion of investment, and he wants U.S. international companies to enter the country and start pumping oil. This could be a positive catalyst for Venezuela's oil sector if the political opening continues.

Restoring normal relations with Venezuela and selectively lifting sanctions opens the world's largest oil reserves to US oil companies that previously operated there. Industry interest is very strong across small wildcatters, upstream, midstream, downstream and the majors, though security and long-term profile questions remain; tens of billions of capital would need to come from capital markets and energy companies rather than US subsidies.

Sending major global oil companies into Venezuela to revive the energy infrastructure is a really tough bet, especially for public companies with shareholders: 25 years of crony capitalism and corruption have not been disrupted, hundreds of billions of dollars are needed just to get oil out of the ground and through the ports, operators would have to work with sanctioned bad actors and could face Foreign Corrupt Practices Act enforcement, the infrastructure is badly degraded after years of decline, and the multi-decade payback requires political stability that is not assured; logistics and rig-building companies share the same stability worry.