Shift Key with Robinson Meyer and Jesse Jenkins Why Trump’s Oil Imperialism Might Be a Tough Sell for Actual Oil Companies
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Jan 6, 2026 Rory Johnston, a Toronto-based oil markets analyst and founder of Commodity Context, dives into Venezuela's oil industry post-U.S. military incursion. He discusses the staggering costs and time required to restore production, estimating up to $100 billion and a decade of work. Johnston contrasts Trump's imperial rhetoric with the reality of $57 per barrel prices and the risks for oil companies like Chevron and Exxon. He also explores how U.S. sanctions and shifts in market dynamics could reshape global oil politics and energy transitions.
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Venezuela's Production Collapse And Potential
- Venezuela once produced millions of barrels but now makes about one million barrels per day due to underinvestment and sanctions.
- The country has massive oil in place, but production collapsed from corruption, sanctions, and lack of capital.
Venezuela's Heavy Sour Crude Is Hard To Use
- Venezuelan crude is very heavy and high in sulfur, chemically similar to Canada's oil sands crude.
- It requires upgraders, diluents, or cokers at refineries, raising capital and logistics costs.
Budget Realistically For Rebuilding
- Expect rebuilding Venezuelan oil output to take $50–$100 billion and five to ten years of investment.
- Don't assume quick returns; every part of the industry needs reinvestment from wells to shipping.