The Trump administration's effort to persuade U.S. oil companies to spend billions to resuscitate Venezuela's crude oil output could lead to an increase in global carbon emissions, according to analysts and academics.
The country produces some of the world's most carbon-intensive oil and any sustained increase in output could pose a significant climate risk. Although the country holds roughly 303 billion barrels of proven oil reserves--about 17% of the global total--production remains relatively small, at around 900,000 b/d.
Most of the country's oil is extra-heavy crude from the Orinoco Belt, which requires more energy to extract, transport and refine than lighter grades. The crude is also sour, meaning it contains high levels of sulfur, which increases carbon intensity.
Upstream emissions from extraction in Venezuela average 88--90 kg CO2e/b, more than double the global average, according to Rystad Energy's Patrick King. This puts Venezuelan crude emissions far above those of other regional heavy crudes, such as Colombian heavy at 27 kg, Mexican at 36 kg and Canadian oil sands at 64 kg.
If Venezuela returned to its historical production peak of 3.5 million b/d, the carbon loading from its oil and gas sector would be roughly equivalent to the emissions from the entire U.S. oil-and-gas industry, which produces about 14 million b/d, according to Deborah Gordon, a climate and oil-sector expert at RMI. She described the potential ramp-up as a "lose-lose proposition" for global climate goals.
Producing and refining Venezuelan crude requires large amounts of energy because of its thick consistency, Gordon said. The "peanut butter-like" crude must be blended with lighter hydrocarbons just to move through a pipeline, she said. This "transportation penalty" ensures that a portion of every tanker's volume and energy use is dedicated simply to making the crude movable.
These same tarlike characteristics also amplify emissions during refining: a deep-conversion process is required to break down the crude, generating large volumes of petroleum coke, a solid carbon residue with higher emissions than coal when burned.
Methane emissions and inefficient gas flaring further inflate Venezuela's high emissions profile. The country's oil and gas assets have a methane intensity of about 2,100 grams per gigajoule, while intensity from most other countries is below 100 g/GJ, according to Catherine Wolfram, an energy economist at MIT.
According to the International Energy Agency, Venezuela's upstream methane emissions intensity is roughly six times the global average, while its flaring intensity is about 10 times higher.
Wolfram said most of these methane emissions could be reduced if the gas were properly captured or flared, but cautioned that Venezuela lacks the regulatory oversight and investment needed to implement what she described as relatively straightforward mitigation measures. On a 20-year basis, she said bringing Venezuela's methane intensity down to levels closer to those seen in other oil-producing countries would yield climate benefits equivalent to hundreds of millions of metric tons of CO2.
The potential environmental damage is compounded by the country's deteriorating infrastructure. Paasha Mahdavi, a political scientist at University of California, Santa Barbara, said Lake Maracaibo in western Venezuela is ground zero for the environmental damage caused by aging infrastructure. The shallow lake is plagued by oil spills and contamination from a network of thousands of kilometers of aging underwater pipelines. Across the country, unreliable electricity service and minimal capacity to capture associated gas would further raise greenhouse gas emissions.
Despite these barriers, the capture of President Nicolás Maduro earlier this month and the subsequent U.S. push to install interim leadership has opened a window for the potential return of Western major oil companies. But while the Trump administration has signaled a desire for U.S. firms to rebuild the industry, foreign investment in Venezuela's oil sector remains cautious.
Mahdavi cited estimates that it would take at least ten years and between $50 billion and $110 billion in upfront investment to revitalize the industry. He said capital directed toward expanding Venezuelan oil could present a zero-sum game for companies, potentially diverting resources from their low-carbon initiatives and decarbonization targets.
Exxon Mobil CEO Darren Woods, who attended a Jan. 9 White House meeting with other U.S. oil companies, described Venezuela as "uninvestable," citing a lack of legal protections and a history of asset seizures by the government.
Chevron, the sole American oil major still operating in the country, declined an OPIS request for comment.
Rystad's King said that while U.S. majors employ cleaner operational standards, technical improvements can only partially offset the inherent intensity of Venezuelan crude. He added that while increased Venezuelan production wouldn't automatically displace lower-carbon intensity crude elsewhere, it may lead to a reshuffling of global trade flows, resulting in a net increase in global emissions.
But any increase in Venezuelan production faces immediate physical and governance hurdles. Because the country has limited storage capacity, production could decrease in the short term if political instability or vessel blockades disrupt exports, according to Diego Rivera Rivota, a researcher at Columbia University's Center on Global Energy Policy. He added that if the export disruptions persist for even a few more months, then the industry would face the risk of forced shutdowns. The current environment is so unstable that it's difficult for analysts to even begin calculating investment risks, he said.
-Reporting by Allegra Fradkin, afradkin@opisnet.com; Editing by Jeffrey Barber, jbarber@opisnet.com
(END) Dow Jones Newswires
January 16, 2026 13:39 ET (18:39 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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