While the Trump administration promotes investment in a post-Maduro Venezuela, major oil companies like ExxonMobil are publicly skeptical. Their stance that the country is "uninvestable" due to the absence of rule of law shows that political guarantees are insufficient without fundamental institutional reforms.

Before any significant capital flows into Venezuela's oil sector, the near future will be dedicated to political negotiation and establishing a stable legal framework. Major players like Exxon still consider the country "uninvestable," meaning the primary focus will be on creating the conditions for future investment, not the investment itself.

Despite major political upheaval in Venezuela, the oil market's reaction is minimal. This is because the short-term supply impact is ambiguous, with an equal probability of production increasing through U.S. re-engagement or decreasing due to intensified blockades, creating a balanced risk profile.

Contrary to assumptions, oil majors are cautious about re-entering Venezuela. They worry about a lack of legal certainty and the risk that any deals could be undone and heavily scrutinized by a future U.S. administration, making the investment too risky.

To spur investment in Venezuela's risky environment, the U.S. administration may need to employ a "carrot and stick" approach with oil majors. This could involve offering capital guarantees to de-risk investments (the carrot) or threatening to revoke leases on U.S. federal lands for non-compliance (the stick).

The 30-50 million barrels of Venezuelan oil the White House claims to be releasing is not new supply. It's largely oil that was already produced but couldn't be exported due to the U.S. blockade. Releasing it is more of a reversal of a self-inflicted disruption than an injection of fresh barrels into the market.

Despite his stated goal of lowering oil prices, President Trump's aggressive sanctions on Venezuela, Iran, and Russia have removed significant supply from the market. This creates logistical bottlenecks and "oil on water" buildups, effectively tightening the market and keeping prices higher than they would be otherwise.

The hosts argue that even with vast oil reserves and government encouragement, the political instability, power vacuum, and lack of rule of law in Venezuela make it a poor investment for oil companies. The cost and uncertainty of securing profits are too high.

The widely cited 300 billion barrel figure for Venezuela's oil reserves is not a measure of what's currently extractable. True "proven reserves" are a function of oil price, investment, and security, making the economically viable amount far lower than the technical potential.