Washington’s reported push to gain greater control over Venezuela’s oil sector is raising questions over the legality of the arrangement, the authority of the country’s interim government and whether the United States can turn Venezuela’s vast petroleum reserves into a major source of global supply.
The issue was examined during a JP Global discussion hosted by Ayaz Khan Lohani, featuring Venezuelan-American attorney Dr. Juan Carlos Lzama, who has worked with US and European energy companies in Venezuela’s oil, gas and mining sectors for nearly three decades.
The discussion followed the January 3, 2026 US military operation that resulted in the capture and transfer of former Venezuelan President Nicolas Maduro and his wife to the United States.
Lzama questioned whether Venezuela’s interim leadership has the constitutional authority to enter long-term agreements involving the country’s oil resources. He said Venezuela’s constitution treats petroleum resources as public property and imposes legal requirements on major decisions involving national energy assets.
The discussion also examined the political future of Venezuela and whether Maduro’s removal would ultimately lead to elections or a broader restructuring of control over the country’s energy sector.
Lohani raised questions about the reported meeting between US Energy Secretary Chris Wright and Venezuela’s acting president Delcy Rodriguez, while Lzama argued that the political circumstances surrounding the interim government should be considered when assessing such agreements.
Venezuela’s oil wealth faces major production barriers
Despite holding some of the world’s largest proven crude oil reserves, Venezuela faces serious obstacles to restoring production.
Lzama said the country’s oil industry has suffered from years of underinvestment, deteriorating infrastructure and the departure of experienced professionals. Thousands of oil wells exist across Venezuela, but only a limited number are currently producing at significant levels.
Restoring output would require major investment in wells, refineries, pipelines, electricity generation, transportation networks and technical services.
The country’s unreliable electricity system represents another major obstacle. Lzama argued that large-scale oil production cannot be restored without rebuilding the wider industrial infrastructure needed to support the sector.
Western investors remain cautious
The discussion also focused on whether major US oil companies would return to Venezuela.
Lzama pointed to the previous experiences of companies including ExxonMobil and ConocoPhillips, which faced asset confiscations and expropriation disputes in Venezuela. He said international investors would require strong legal protections, political stability and guarantees that future governments would respect investment agreements.
Without those conditions, Venezuela could struggle to attract the tens of billions of dollars potentially required to rebuild its energy industry.
The discussion also examined the role of China and Russia, both of which have maintained significant economic and strategic interests in Venezuela.
Could Venezuela help ease a global oil shock?
Lohani connected Venezuela’s oil potential with the wider energy crisis surrounding the Strait of Hormuz, one of the world’s most important oil transit routes.
Greater Venezuelan production could eventually provide additional supplies to international markets if Middle Eastern disruptions persist. However, Lzama warned that Venezuela cannot rapidly replace large volumes of disrupted oil.
He said rebuilding the country’s production capacity would take years and require enormous investment. Having some of the world’s largest underground reserves does not mean those resources can immediately reach international consumers.
The discussion also examined whether greater US involvement in Venezuela could reduce Chinese and Russian influence in the Western Hemisphere.
Lzama cautioned against viewing Venezuela simply through the lens of competition between major powers, arguing that the country’s fundamental problems require political legitimacy, functioning institutions and economic stability.
For ordinary Venezuelans, the immediate concerns remain electricity, fuel, food and economic security.
The discussion concluded that Venezuela’s oil reserves could become a major economic asset, but transforming that potential into sustained production will depend on political stability, constitutional legitimacy, infrastructure, international investment and the restoration of skilled manpower.
