Political turmoil and weak institutions still make Venezuela’s energy sector unsafe for U.S. investors, despite Washington’s push to revive production
By: Ya Libnan, Op.Ed
The stunning capture of Venezuelan President Nicolás Maduro by U.S. forces and his transfer to federal custody in New York marks one of the most dramatic geopolitical shifts in Latin America in decades. Maduro’s arraignment on U.S. criminal charges sent shockwaves through Caracas — but the reality on the ground remains far messier than Washington’s victory narrative suggests.
Despite the headlines, the political regime in Venezuela has not fundamentally broken down. Maduro’s vice president, long-time Chavista loyalist Delcy Rodríguez — a key figure in the Chávez/Maduro era — has been installed as interim president, backed by the Venezuelan Supreme Court and the nation’s military apparatus. Her leadership, while constitutionally framed as temporary, continues many of the same political practices that have plagued Venezuela for years.
An Empty Victory for Investors
President Trump has touted U.S. control over Venezuela’s oil sector and publicly encouraged U.S. oil giants to invest billions to resurrect the country’s deteriorated oil infrastructure. The White House even promised “total safety” for American energy firms willing to commit capital to Caracas.
But look past the rhetoric: those assurances hinge not on the rule of law but on U.S. political will and an ongoing foreign occupation of Venezuelan oil policy. That is not the same as stable, contract-based sovereign governance.
Historically, foreign oil companies have been burned in Venezuela. Under Hugo Chávez — and then Maduro — private assets were nationalized, contracts were rewritten, and property rights were subordinated to political agendas. Companies learned the hard way that “legal security” in Caracas was ephemeral. Repeating that mistake would be unwise.
The Regime Is Not Truly Reformed
Maduro’s capture might dismantle one leader, but it does not dismantle the political ecosystem that enabled authoritarian governance for decades. The military, the PSUV party structures, and the patronage networks built around oil revenues remain intact. A Maduro deputy — Rodríguez — now sits in the presidential palace with a mandate framed around continuity, not transformation.
Even if elections are promised under constitutional provisions, the timeline and legitimacy of any future electoral process are deeply uncertain. This is not the foundation for secure long-term investment.
Investment Risk Extends Beyond Sanctions
Let’s put aside questions of sanctions for a moment. Even in a san- san future, these core risks persist:
- Property rights aren’t guaranteed — past expropriations still stain Venezuela’s investment climate.
- Legal protections are weak — contracts have been overridden for political reasons before.
- Institutional stability is absent — the judicial system and regulatory bodies lack independence from political influence.
- Security and infrastructure are crumbling — Venezuelan oil infrastructure has deteriorated so much that revitalization would require decades of capital, with no certainty of returns.
In short: the political backdrop has not shifted enough to justify billions of dollars in long-term commitments.
U.S. Control Is Not the Same as Venezuelan Legitimacy
Some argue that direct U.S. control or oversight of Venezuela’s oil assets could change the calculus — compelling Venezuelan oil production back into global markets under Western-friendly governance. But there’s a strategic difference between control and sovereign legitimacy. Oil companies invest in sovereign risk — not prolonged military occupations or transitional administrations that might last years, if not decades.
Trump’s push to bring U.S. oil firms back into Venezuela is motivated by broader geopolitical aims: undercutting competitors like China and Russia, boosting U.S. energy dominance, and lowering fuel prices at home. While these aims may align with corporate interests, they do not inherently secure investment against political reversal or public backlash inside Venezuela.
Conclusion: Patience Is Still Wise
Capturing Maduro was a dramatic moment — but it didn’t dismantle the structures that have made Venezuela one of the most inhospitable places for foreign investment in the global oil industry. Until there is authentic democratic transition, legal reform, and sovereign legitimacy, the underlying risk remains political, not merely market or operational. That is a warning sign that U.S. oil companies and global investors should heed.
For Venezuela to become a genuine business destination, its governance must change fundamentally — not just at the top, but across its institutions.
