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U.S. President Donald Trump’s plan to parlay Washington’s de facto control of Venezuela’s economy into an oil industry renaissance has now melded with his notion to use Venezuelan crude to wean India off Russian oil. Neither is likely to come about in the near future.

The good news, from the United States’ point of view, is that the pliant government in Venezuela just overhauled a decades-old oil production law, a move meant to make the country (the holder of the world’s largest oil reserves) an appealing investment destination for energy companies after years of decline and deterioration. The reform, which passed last week, is, on paper, a fairly radical revision to the resource socialism that prevailed under former Venezuelan strongman Hugo Chávez and which ushered in the country’s economic decline.

U.S. President Donald Trump’s plan to parlay Washington’s de facto control of Venezuela’s economy into an oil industry renaissance has now melded with his notion to use Venezuelan crude to wean India off Russian oil. Neither is likely to come about in the near future.

The good news, from the United States’ point of view, is that the pliant government in Venezuela just overhauled a decades-old oil production law, a move meant to make the country (the holder of the world’s largest oil reserves) an appealing investment destination for energy companies after years of decline and deterioration. The reform, which passed last week, is, on paper, a fairly radical revision to the resource socialism that prevailed under former Venezuelan strongman Hugo Chávez and which ushered in the country’s economic decline.

The problem is that it is all just on paper for now—and hurriedly drafted, at that. It’s not clear if the changes to rules for joint ventures, private investment, royalty rates, and more will be enough to assuage the concerns of major oil companies that have been repeatedly burned in Venezuela since the 1970s.

“On the one hand, it is remarkable progress,” said Graham Kellas, senior vice........

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