The Peter Zeihan Podcast Series - Venezuela's End: The Oil Question || Peter Zeihan

Episode Date: January 7, 2026

Venezuela only has one realistic path forward: Oil. That doesn't mean it's a sure thing, though. So, let's lay it all out.Full 12 minute analysis available exclusively on Patreon ➡️ https://bit.ly/3Ny2ln9

Hey, all, Peter Zine here, company from Colorado. Today, we're going to talk about Venezuela, but from perhaps a positive scenario point of view. The core issue is oil. That's where all the money comes from. And if you're going to reconstruct the country in any form, that's where it's going to be able to pay for itself. I really don't see the Trump administration dumping $100 billion into regenerating the infrastructure. So let's talk about what's necessary and why and how it might, might happen. Venezuelan crude falls today into two general categories.

The first chunk, the chunk that is responsible for about 80% of the production is a place called the Orinoco Belt, which is down in the Amazon. It is not crude in the technical serum, it's something called bitamin, which requires incredible amounts of energy and steam injection to liquefy it enough that you can bring it to the surface. And then you run it through something called an upgrader, which is kind of like, a refinery just to make it liquid enough to be stable for shipment. And then you have to inject something called dilutant into it so again it can flow. And then you pump it north to

the coast where it's loaded for export. This makes it the most expensive crude in the world per barrel produced and requires incredible technical acumen to function. Historically speaking, most of the work on the upgraders has come from US multinationals, a little bit from say Total in France, Schlumbergerge, Baker Hughes, all of those oil services firms were heavily involved in the development of the program,

and eventually they trained up PDVSA, which is the state oil company to do a lot of the work. But that kind of came to a crashing halt back in 2002. When we first had a political coup against Chavez, followed by kind of an economic resistance

against the professionals within Padevisa. When that process was over, and Chavez re-reqaeda, consolidated control over the country. He purged Padovesa. And what we found out was basically everyone who had an engineering degree didn't like the guy and joined in the coup. And so he got rid of all of them. And since then, we've had a steady degradation in what Peta Vesa can do. It's no longer one of the most capable oil companies in the world. It's barely holding together.

And if it wasn't for the presence of U.S. Super Major Chevron in some of these projects, most of them probably would have shut down. In order to get the Orinoco back up to what it could be, so it's producing one, two million barrels a day, you're talking about investment at least in the tens of billions, probably closer to 200 because there's several stages to this process. Think of it kind of like what the Canadians do with oil sands, but remove easy capital access, remove the skilled labor, remove the rule of law, remove the physical pipeline linking it to the world's largest consumer market. They have to do this all in the Amazon, more or less by themselves without cash, but still bringing in foreigners. Very, very expensive projects, and I think the most likely

outcome is that this is going to eventually fall down to zero, because they're simply not going to be able to maintain it. The second part of the Venezuelan oil complex is a little bit more interesting from a functional point of view, if not a chemistry point of view, and that is the Lake Maracaibo region.