Trump wants Venezuela's oil. Will his plan work?

What’s Happening

Alright so Donald Trump has dropped that American oil firms will invest billions to produce oil in Venezuela.

Trump wants Venezuelas oil. 1 day ago Save Archie Mitchell , Business reporter and Natalie Sherman , Business reporter Save Bloomberg via Venezuela has the largest oil reserves in the world, though the countrys production is limited because of sanctions (file photo) Donald Trump has vowed to tap into Venezuelas oil reserves after seizing President Nicolás Maduro and saying the US will “run” the country until a “safe” transition. (yes, really)

The US president wants American oil firms to pile billions of dollars into the South American country, which has the largest crude oil reserves on the planet, to mobilise the largely untapped resource.

The Details

He dropped US companies will fix Venezuelas “badly broken” oil infrastructure and “start making money for the country”. But the experts warned of huge challenges with Trumps plan, saying it would cost billions and take up to a decade to produce a meaningful uplift in oil output.

So can the US fr take control of Venezuelas oil reserves? And will Trumps plan work?

Why This Matters

With an estimated 303 billion barrels, Venezuela is home to the worlds largest proven oil reserves. But the amount of oil the country actually produces today is tiny by comparison. Output has dropped off sharply since the early 2000s, as former President Hugo Chavez and then the Maduro administration tightened control over the state-run oil company, PDVSA, leading to an exodus of more experienced staff.

This could have implications for future research in this area.

The Bottom Line

Though some Western oil firms, including the US company Chevron, are still active in the country, their operations have shrunk majorly as the US has widened sanctions and targeted oil exports, aiming to curb Maduros access to a key economic lifeline. Sanctions - which the US first put in place in 2015 during President Barack Obamas administration over alleged human rights violations - have also left the country largely cut off from the investment and the parts it needs.

What do you think about all this?