Trump's Venezuela economic recovery plan is failing, analyst says

The economic recovery plan championed by former U.S. President Donald Trump for Venezuela is faltering, according to Venezuelan economic analyst Evanan Romero. Six months after the Venezuelan oil industry was opened to private investment, Romero observes a lack of concrete progress. No binding contracts have been signed, and no significant capital has been committed to increase oil production. Instead, only memorandums of understanding and letters of intent are in circulation.

Despite these shortcomings, U.S. Interior Secretary Doug Burgum defended the administration's oil policy in Venezuela on August 5. He asserted that the new framework had successfully redirected Venezuelan oil from "hostile actors" back into the international market. Data shows that Venezuela exported approximately 786,000 barrels per day to the U.S. in July, the highest volume since early 2019. However, the country's total oil exports saw a decrease, falling from 1.24 million barrels per day in May to 1.16 million barrels per day in July.

Romero, who was involved in Venezuela's "Oil Opening" in the 1990s, warns the White House that the recovery remains nominal. He points to inactive drilling rigs and a lack of investment in restoring field capacity, which has actually diminished. Romero further criticizes the current structure, which he describes as "suffocating," noting that Petróleos de Venezuela (Pdvsa) aims to control 60% of production without contributing capital. He also highlights the management's inexperience, composed of lawyers and bankers rather than oil professionals, and persistent opacity under an anti-blockade law that distributes rights without public scrutiny.

Critical obstacles to investment include prohibitive fiscal conditions, such as unmanageable royalties and parafiscal charges of 25%, particularly in the Orinoco Belt. Additionally, transporting crude oil requires significant amounts of light crude for dilution, adding further costs.