President Donald Trump says major oil companies are ready to pour money into Venezuela. His Treasury Secretary has a different story.
Treasury Secretary Bessent Says Big Oil Has No Interest in Venezuela Despite Trump's Claims
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Corporate Boards Move Like Glaciers
Speaking at the Economic Club of Minnesota on Thursday, Treasury Secretary Scott Bessent threw cold water on the administration's optimistic Venezuela narrative. The major oil companies with corporate boards are "not interested" in Venezuelan investments, he explained. This kind of move represents a "big strategic shift" for corporate boards, which means they typically "move slowly." Bessent noted he's in constant communication with Mike Wirth, CEO of Chevron Corp. (CVX), about the situation.
But here's where it gets interesting. While the majors are pumping the brakes, Bessent said the Treasury Department is getting swamped with calls from "independent oil companies and wildcatters" eager to get into Venezuela. These wildcatters are the high-risk, small-scale explorers who drill in untapped territory hoping to strike it rich. They're enthusiastic, sure, but they don't have the massive scale needed to meaningfully shift global oil supply.
Trump Says $100 Billion, Bessent Says Not So Fast
The timing of Bessent's comments is notable. Three major U.S. oil company leaders are potentially meeting with Trump at the White House on Friday. Meanwhile, Trump told Fox News host Sean Hannity on Thursday that oil companies plan to invest close to $100 billion in Venezuela. That's quite a gap between what the president is promising and what his Treasury Secretary is hearing from the industry.
The U.S. has made clear it intends to maintain firm control over Venezuela's oil industry. Energy Secretary Chris Wright laid out a detailed plan to revive the sector, saying the U.S. would continue overseeing the sale of Venezuela's oil production "indefinitely." But major oil companies are demanding "serious guarantees" from the administration before committing capital to the Latin American nation.
Mixed Signals from Market Observers
Billionaire investor Jim Mellon recently weighed in, acknowledging that Venezuela's oil industry faces a brutal road to recovery and meaningful production increases won't happen quickly. Despite that, he suggested investors should boost their exposure to the oil sector.
CNBC's Jim Cramer took the opposite approach, warning investors against chasing oil stocks amid the Venezuela chaos. He called it a "suboptimal strategy."
Price Action: Despite the hesitation from major oil companies, energy stocks have rallied following the weekend capture of Venezuelan leader Nicolás Maduro by U.S. forces. Valero Energy Corp. (VLO) jumped 17.20% over the past week, while PBF Energy Inc. surged 17.64%, according to market data. Chevron gained 4.67%.
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