World’s largest oil reserves amid high extraction costs, falling production and new geopolitical tensions
The first Saturday of 2026 will remain etched in Latin America’s geopolitical memory as the day the United States decided to overcome all barriers of caution and intervene militarily in Venezuela to capture President Nicolás Maduro. An unprecedented choice that transformed a protracted conflict into an open crisis, with profound consequences for state sovereignty, the international order, and the global energy market.
ARI I ZI I KARAKASIT
However, this move was not simply a “police” act: the United States did not limit itself to the capture of a head of state accused of transnational crimes, but openly declared its intention to take a leading role in Venezuela, until an “orderly transition” of power is guaranteed. The American president declared that the US commitment would not stop at the capture operation, but would continue with the management of the country, with the declared objective of stabilizing the internal situation and reviving the national economy.
Although the entire operation resembles more a harsh renegotiation of spheres of influence after the Cold War than an energy war in the literal sense, the key element of this narrative remains oil.
Venezuela has one of the world’s largest oil reserves, with reliable estimates of around 303 billion barrels of proven reserves. This amount exceeds that of any other country and represents almost a fifth of global reserves. However, the theoretical value of this wealth has historically been difficult to translate into real economic revenue. Despite this potential, domestic production, which in the recent past had reached much higher levels, has been significantly reduced.
A SECTOR AFFECTED BY SYSTEMIC FRAGILITY
In the 1990s and early 2000s, Venezuela produced over three million barrels of oil per day, ranking among the largest global producers. Today, after decades of mismanagement, systemic corruption, and international sanctions, production has fallen to a fraction of those figures. In 2024, average national production hovered around 950,000 barrels per day, and some months exports reached around 900,000 barrels per day, signals of a cautious recovery but far from historical levels of full capacity. In 2025, official data show production of around 1.1 million barrels per day, a figure that signals a slight recovery compared to the darkest years of the oil crisis, but which remains modest when compared to the theoretical potential stemming from the giant available reserves.
THE PROBLEMS OF “EXTRA HEAVY OIL”
Venezuelan oil is mostly “extra heavy oil,” a type of energy source that is more difficult and economically more expensive to extract and process than light oil. This explains why, despite its vast resources, the country produces so little: extra heavy oil is very dense and viscous, and therefore difficult to extract.
It often needs to be heated underground or diluted with other oils. It also contains more sulfur and metals, making processing and refining more complex and expensive. It can only be processed in highly specialized refineries, which limits buyers and reduces profit margins. In short, it requires more energy, more technology, and more investment throughout the production chain.
WASHINGTON PROJECTS
Years of underinvestment and the crisis at PDVSA, the state-owned oil company that was once the backbone of the national economy, have left the production apparatus fragile and outdated. The US president has stressed that US energy companies can bring capital and technical expertise to rebuild the sector, predicting investments of over $100 billion and underlining that it will take years, if not decades, of continuous work to restore production to pre-crisis levels.
Venezuela’s energy dimension is and will remain central not only for Caracas and Washington, but for the entire global energy market. In a context where OPEC+, the cartel of which Venezuela was a founding member, has decided to keep production levels stable to avoid further shocks, the situation of the South American country remains a factor of uncertainty. Its ability to influence the international price of oil remains potentially important, although current production is insufficient to exert a significant impact in the short term.