On January 3, 2026, the capture of Venezuelan President Nicolas Maduro by US forces marked a turning point in US-Venezuela relations and reopened questions about the future of Venezuela’s oil sector. In principle, improved political access and the easing of restrictions could be expected to stimulate renewed foreign investment in one of the world’s most resource-rich oil economies. Despite this apparent political incentive, investment by major US oil companies has remained limited.

This article examines why firms have been reluctant to reenter Venezuela, arguing that high production costs associated with heavy crude, severe infrastructure deterioration, and persistent policy uncertainty significantly reduce expected returns and increase investment risk. These factors raise the option value of waiting, making delay a rational economic response rather than a failure of political incentives. The analysis highlights that, without credible long-term institutional guarantees, resource abundance alone is unlikely to translate into sustained foreign investment in high-risk, resource-rich economies such as Venezuela.

Venezuela has one of the largest proven crude oil reserves in the world. According to the US Energy Information Administration, Venezuela’s oil reserves amount to approximately 303.8 billion barrels, making it the country with the greatest proven oil reserves in the world. These reserves are responsible for approximately 17 percent of the world’s total proven crude oil. Most of them are concentrated in the Orinoco Belt, where oil is predominantly heavy crude, demanding specialized extraction and refining techniques that raise production costs compared to lighter grades. This type of crude oil must be heated to bring it to the surface and diluted with other hydrocarbons before it can be processed and declared a final product, raising both capital and........

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