President Trump's vision of American oil companies rebuilding Venezuela's broken petro-sector creates his biggest test yet of the U.S. industry's tolerance for risk.

Why it matters: Trump and other administration officials haven't been subtle about calling Venezuela's massive oil reserves a key reason for toppling President Nicolás Maduro.

• "You cannot continue to have the largest oil reserves in the world under the control of adversaries of the United States ... but not benefiting the people of that country," Secretary of State Marco Rubio told NBC yesterday, citing China, Russia and others.
• Trump told reporters yesterday aboard Air Force One: "We're in the business of having countries around us that are viable and successful, and where the oil is allowed to freely come out ... It gets the prices down. That's good for our country."

🖼️ The big picture: U.S. firms' appetite for investing in Venezuela's dilapidated infrastructure is far from certain, multiple analysts caution, despite U.S. officials' confidence.

• "The potential to boost Venezuelan production hinges on capital, which in turn depends on political stability and likely requires guarantees from the US government," Jefferies Global Research & Strategy analysts said in a note yesterday.
• U.S. companies "will be wary to enter without a stable security environment, and very favorable terms to reduce the risk. Especially with markets over supplied and prices low in the near term," Eurasia Group analyst Gregory Brew said via email.

The intrigue: A lot of questions remain about how the U.S. could enable conditions ripe for billions of dollars in new investment, though Rubio broadly told CBS yesterday that companies would need "certain guarantees and conditions."

• He said the U.S. "quarantine" on sanctioned oil tankers creates leverage for changes there.

💭 My thought bubble: This isn't the only case of Trump asking oil companies to move out of their comfort zone in pursuit of big rewards — with big risks.

• The Interior Department envisions selling drilling rights in Arctic seas off Alaska's coast, and off the Pacific coast as well.
• Companies are psyched about stepped-up lease sales in the Gulf of America (renamed from the Gulf of Mexico).
• But interest in other coastal areas — and the costs, legal battles and PR headaches that come with it — is kind of a shrug emoji right now.

🏃Catch up quick: Getting back to Venezuela, Chevron remains the only big U.S. player operating there right now.

• Other companies — notably Exxon and ConocoPhillips — left the nationalized sector around two decades ago in a dispute with then-President Hugo Chávez's regime.
• They're owed billions of dollars under various arbitration cases claiming expropriated assets.

🔭What we're watching: Preliminary signs of industry interest. So far, major U.S. companies have been tight-lipped.

• Rubio told ABC there will be "tremendous interest if it can be done the right way."
• Energy Secretary Chris Wright and Interior Secretary Doug Burgum will soon be "taking an assessment and speaking to some of these companies," he said.

Decades of mismanagement and, more recently, sanctions brought sharp declines in Venezuela's oil output.

What we're watching: How quickly production might return to former highs, which depends on lots of variables.

• Right now Venezuela — via state-owned PDVSA and some private operators — produces under 1% of total global supply despite holding what are thought to be the world's biggest reserves.

What they're saying: Luisa Palacios, a researcher with Columbia University's energy think tank, wrote yesterday that an optimistic but plausible scenario could see production rise by 500,000 to 1 million barrels per day within two years.

• This would stem from a mix of better governance and lifting of U.S. sanctions that remain in effect.
• She sees potential for international companies already there — like Chevron, Repsol, and ENI — to boost output under current licenses.

Amena Bakr, an analyst with the firm Kpler, cited estimates that it would take $15 billion to $20 billion over the decade to boost and sustain output in Venezuela.

• Big multinational oil companies are about return on investment, not "political noise," she posted on X, adding: "No one's rushing in."

The bottom line: "[A] more consequential increase in oil production would require a change in the oil law to allow significant participation by private investors in the oil industry," Palacios writes.

• Palacios sees — again, with lots of caveats! — a potential return to the country's peak output of 3.5 million barrels per day in seven to 10 years.

🗳️ President Trump's claim that U.S. oil companies will play a big role in Venezuela is quickly spilling into partisan battles over the military strike.

• What they're saying: "This, from the beginning, has been about getting rid of Maduro, grabbing Venezuela's oil for American oil companies and Trump's billionaire buddies," Sen. Chris Van Hollen, a Maryland Democrat, told CBS yesterday.

💵 The state of oil markets is influencing what just happened in Venezuela and what's ahead in cross-cutting ways.

• Why it matters: Low pump prices — a political priority for Trump — and an oversupplied oil market give the White House running room for aggressive interventions in oil-producing regions. That was true with the bombing of Iran, and it's true with Saturday's action in Venezuela.
• Yes, but: This cuts both ways, with low prices and ample supply among the many things that could limit industry appetites for risky new investments.

⛽ More of Venezuela's heavy crude flowing to the U.S. would benefit domestic refineries that are configured to rely on those grades. Go deeper.

At least three developers are in court battling Trump officials' halt to offshore wind projects under construction — and disclosing fresh info in the process.

Why it matters: The Interior Department's Dec. 22 pause of five projects was among the Trump team's most aggressive moves yet against offshore wind.

Catch up quick: Since our last newsletter, Ørsted, Equinor and Dominion Energy have initiated federal court battles against the halt to their Atlantic Coast projects.

A few takeaways from the filings thus far...

🖥️ It is, yes, a data center story. Dominion's complaint says the halt runs afoul of Trump's push for quickly finding new power for data centers.

• "CVOW will provide electricity to serve the world's largest concentration of data centers," it states.

👷 Some of these projects are quite far along. Ørsted's Revolution Wind off Rhode Island and Connecticut, a joint venture with Global Infrastructure Partners, is 87% done, a court filing states.

• Dominion's complaint notes it has invested $8.9 billion thus far in the Coastal Virginia Offshore Wind project, over two-thirds of the total projected cost of $11.2 billion.

🪖 The security concerns remain opaque, the companies say. The filings accuse Interior of failing to back up its claims about new information revealing national security risks.

• For instance, Revolution Wind says it had a Dec. 30 meeting with Interior's offshore energy branch "to seek access to the classified information for Revolution Wind representatives with security clearances."
• The ocean energy bureau made "no efforts" to set up a classified briefing, "despite repeated inquiries," a filing alleges.

Giphy

🏭 The Energy Department issued orders to keep coal-fired power units in Colorado and Indiana running beyond scheduled shutdowns, the latest of several such moves.

⚖️ A coalition of renewables groups sued Interior and other agencies over a suite of policies that "place wind and solar technologies into second-class status without providing any rational justification."

⚛️ Duke Energy has submitted its first site application with the U.S. Nuclear Regulatory Commission for a new reactor in North Carolina. Go deeper.

🚘 Tesla vehicle sales declined for a second consecutive year in 2025, hitting their lowest point since 2022.

• The results mean that Chinese automaker BYD sold more EVs in 2025 than Tesla for the first time in a full year: 2.26 million for BYD vs. 1.64 million for Tesla. Go deeper.

Private equity firms invested $68.5 billion into 93 deals around data centers and energy in 2025, according to PitchBook data.

Why it matters: It's a record in terms of total amount over the past eight years.

Unlock much more on data center deals — and a steady diet of scoops and smart analysis — by talking to our sales team about Axios Pro Deals.