After the USA captured Venezuela’s president initially of 2026, Donald Trump promised to “unleash” the rustic’s oil provide. He sought after corporations to take a position US$100 billion (£74 billion) to pay money for it.
Giant oil despite the fact that, turns out not up to interested in that concept, showing to believe Venezuela too pricey or dangerous. Exxon Mobil’s unenthusiastic reaction, describing Venezuela as “uninvestible”, even earned a private rebuke from Trump.
So possibly Trump misunderstood how large oil works, and considered oil companies because the quintessential possibility takers – without equal exploiters of uncertainty. Possibly he had in thoughts Daniel Day Lewis’s persona within the movie There Might be Blood, who was once prepared to possibility the whole thing to get his arms of extra of the black stuff.
However whilst that can had been true for some oil companies within the early 1900s, within the twenty first century, not anything may well be farther from the reality. Giant oil in 2026 does no longer like uncertainty. It prefers to put money into what it is aware of, like plastics and petrochemicals. It does no longer need to get entangled with issues as unsure as Venezuela and inexperienced power.
This concept is subsidized by way of my very own analysis at the world oil trade, which displays that giant oil corporations have a tendency to base their industry methods on long run oil manufacturing.
And South American international locations play just a minor position on this outlook. As a substitute, large oil is curious about two key spaces: shale oil in the USA, and increasing petrochemical manufacturing in Asia.
The low price of shale oil extraction provides it important price benefits as a uncooked subject material for refineries, whilst Asia’s rising percentage of worldwide production supplies a enlargement marketplace for petrochemicals.
This in flip is related to grease corporations in the hunt for to milk rising call for for plastics (and decrease call for for delivery fuels) as a part of a transparent and long run trail to learn. That trail is what issues maximum to grease corporations, and Trump’s plan for Venezuela (nor the golf green transition for that topic) does no longer supply it.
The concern of benefit could also be the explanation why governments who need greener or inexpensive power can not depend on robust oil corporations to lend a hand them out.
Power in oil
Underpinning the oil trade’s excessive energy within the international financial system is its captive marketplace, the place client selection is proscribed to a small selection of manufacturers. With regards to the oil marketplace, the ones customers are country states. Or even the ones with massive oil reserves of their very own want the corporations’ era to refine it.
Venezuela’s oil reserves had been as soon as a part of this world captive marketplace. However analysis has proven that no longer oil is equivalent. And the variety of goods which may also be fabricated from a barrel of it relies on a mixture of geological traits and technical functions.
Donald Trump at a gathering with oil executives in January 2026.
EPA/JIM LO SCALZO / POOL
So whilst Venezuela produces extra crude oil then it consumes, it must import fuels and petrochemicals to satisfy the desires of its financial system. It’s because it lacks the refineries to supply those merchandise locally.
World corporations within the oil refining and products and services sectors regulate key era and highbrow assets on this house. With out their participation, Venezuela’s crude will stay mistaken for world refineries.
This elementary inequality round get right of entry to to complicated refining era method there’s little dating between a rustic’s oil reserves and whether or not or no longer it must import oil merchandise.
Giant oil would possibly but make a decision to stump up the funding required to open Venezuela’s oil trade if appropriate promises are supplied. However such state backed get right of entry to puts the chance with tax-payers, when the ones more or less promises may well be higher deployed within the building of fresh power.
And whilst society wishes massive companies to take a position, politicians wish to direct this funding against productive alternatives. Extra affordable oil, petrochemicals and plastics don’t seem to be the solution.
Governments wish to recognise that the issue with oil corporations isn’t that they take too many dangers, however slightly that they take inadequate dangers in spaces the place funding is wanted maximum. For as my analysis additionally displays, the retreat of the oil corporations from inexperienced funding has been matched by way of a ramping up in their funding in prime emission and closely polluting plastics and petrochemicals.
Addressing this might not be simple. It is going to calls for robust supranational coordination amongst states to persuade the sphere, by way of expanding the prices of oil manufacturing and restricting the development of latest infrastructure. However that’s an excessively other way to seeking to “unleash” the oil provide of a complete country.
