WSJ What’s News - Trump’s Bet on Reviving Venezuela’s Broken Oil Industry

Episode Date: January 5, 2026

A.M. Edition for Jan. 05. Venezuelan President Nicolás Maduro is slated to appear in a federal court Monday, facing charges related to cocaine trafficking. This as President Trump reiterates that the U.S. is calling the shots in Venezuela as a new landscape of power players in the country emerges. That said, any profits stemming from Venezuelan oil are likely years away, according to Energy Aspect founder Amrita Sen. And we look at a potential market-first diabetes treatment for children as young as one. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

More details, but also more questions about the Trump administration's plans for Venezuela. We'll get the latest. Plus a look at the likely years of work needed to boost Venezuela's oil output. No doubt Venezuela does have reserves and U.S. companies are owed money. However, this is not as simple as just going back and being able to produce the dilapidation of the Venezuelan infrastructure. I cannot stress how bad that is. And the rest of the day's news, including a potential market-first diabetes treatment for children as young as one. It's Monday, January 5th. I'm Luke Vargas for the Wall Street Journal,

and here is the AM edition of What's News, the top headlines and business stories, moving your world today. The Trump administration is offering conflicting narratives about its intentions in Venezuela after capturing its president, Nicholas Maduro, over the weekend. President Trump described the U.S. as being in charge of, of the country yesterday evening, though that control may be indirect in nature, as Secretary of State Marco Rubio explained in interviews yesterday, including in this remark on ABC's This Week with George Stephanopoulos when he was asked if the U.S. was directly running Venezuela.

What we are running is the direction that this is going to move moving forward, and that is we have leverage. This leverage we are using and we intend to use. Rubio specified that that leverage came in the form of the U.S. military and that Washington was prepared to take action if those in Venezuela with, quote, control over the levers of power, end quote, didn't act in America's interests. So who are those people? For now, it's de facto leader Delci Rodriguez, Maduro's longtime vice president and confidant. After initially condemning Maduro's arrest and demanding his return, she has since struck a softer tone saying Venezuela sought peace and dialogue. Journal National Security reporter Robbie Gramer says the U.S. will be

watching closely to see how cooperative Rodriguez really is. Secretary of State Marco Rubio says we're not running Venezuela in the literal sense. We're working with the new leadership in Venezuela after Maduro's ouster. And Rodriguez is in power for now, but at the same time that the Trump administration says they're in contact with her, they're talking about working with her on a transition. Marco Rubio is still saying this is an illegitimate government, that there needs to be a transition to a democratically elected government in Venice. And there are other power players worth watching, including Delci Rodriguez's brother, who runs Venezuela's National Assembly, as well as the country's defense minister and interior minister whose support the U.S. may need if it wants Venezuela run with American interests in mind. We've left a link to a who's who in Venezuela in our show notes. Meanwhile, Maduro is set to appear in Manhattan federal court today, where he's facing charges related to cocaine trafficking. Prosecutors will eventually be tasked with proving that the strong man is.

the boss of what they've called the Cartel of the Sun, a loose-knit organization they alleged took millions of dollars in bribes from Colombian guerrilla leaders who shipped thousands of tons of cocaine through Venezuela to the U.S. and Europe. Maduro denies the charges. National politics reporter Sabrina Siddiqui says Maduro's trial could present the Trump administration with an opportunity to focus its actions in Venezuela on the drug trade instead of on foreign policy objectives that polling shows voters care little about. did talk to a number of Republican strategists and pollsters who said that they believe that the administration could bill this as a success if the Venezuela operation is truly limited in scope

and say, look, we're stopping the flow of illicit drugs into the U.S. And maybe they can even make the case that this may unlock cheaper oil for the U.S. economy, potentially bringing down prices at the gas pump. There's going to be a lot of focus on Venezuela in the coming weeks. But by and large, the consensus, even among campaign strategists and people who are working on midterm elections, is that unless something truly extraordinary or unpredictable happens with respect to what the administration is doing in Venezuela, it's not going to overtake the economy and cost of living as the main driver of how people plan to vote in this election.

And Sabrina said Democrats opposed to President Trump's actions face. a similar delicate balance. I spoke to a Democratic pollster who was President Biden's former pollster and he actually warned Democrats not to get too consumed by the legality of Trump's actions in Venezuela or even by litigating what the U.S. role should be in the region. And instead, he said that Democrats should really stay focused on voters who are wondering, why is this a priority rather than my economic well-being. Well, if there is a link between U.S. involvement in Venezuela and American's economic well-being, President Trump appears to see it around oil.

Trump has touted Maduro's ouster as a boon for the oil industry, pledging to dispatch American drillers to Venezuela and saying the U.S. could keep some of the proceeds. Amrida Sen is the founder of market analysis firm Energy Aspects. Amrida, I see here shares in Chevron, the only major U.S. oil company that's actually currently operating in Venezuela have been rallying pre-market. But crude prices are little changed this morning. What's up? I think it's a great question because you think that there could be a disruption to Venezuelan oil, which therefore means that prices should be up. But, you know, our view has been, by the way, that we're probably going to see prices come off for two main reasons.

One, a lot of people are interpreting this, whether correctly or incorrectly, in our view, it's in. incorrect, that there's going to be a sudden surge in Venezuelan production that just comes to the market. Venezuela ultimately holds the biggest oil reserves in the world. I think that's very simplistic given, you know, just to raise production by half a million barrels per day, will take them two years and at least $10 billion, right? So you can just imagine the scale of what we are dealing with, let alone go to two, two and a half million barrels per day. For context, they were producing just above a million barrels per day late last year. So I think that is one of the reasons why oil is down. But the other factor that oil is down is because we do have a big surplus. In 2026,

oil markets are looking at well over 2 million barrels per day oversupplied. So that's why the market isn't really jumping at any possibility that, if anything, in the short term, by the way, there is more risk to the downside than the upside because the U.S. block, it still remains in place, U.S. sanctions remain in place. And ultimately, nothing's actually changed because the vice president was taken over still very much is from the midulage. You know, we've heard from President Trump promising a big influx of American oil company capital into Venezuela. I'm curious what your take is on that. And I note that according to journal reporting, Chevron, as well as other U.S. oil and gas companies, didn't receive any advance warning about what occurred over the weekend. What's the

outlook here? Look, they will be interested in going back, no doubt. Venezuela does have reserves and US companies are owed money, no doubt about that. However, this is not as simple as just going back and being able to produce the dilapidation of the Venezuelan infrastructure. I cannot stress how bad that is. Venezuelan oil is extremely heavy oil. It requires what we call diluent, like light oil to blend with it. It requires a lot of gas to kind of the processing side of it. All of that infrastructure is completely destroyed. It will take years to rebuild that. we also have to remember that Venezuela and Pedivasa, the state-old company, have huge tens of billions in debt to China, to other companies. And then it becomes a question of, okay, what pecking order are you in, right, in terms of receiving that debt back?

So why would you be the company that suddenly becomes the first to go back and say, okay, we are going to be the ones going in there? The final point I'll say is that let's say the U.S. says, okay, go in there, these are the contracts. these companies will be very wary that a new Venezuelan government will actually uphold those. So I don't think any company is actually in a rush to go back and be the first to jump in. You mentioned China there, a prior recipient of Venezuelan oil, but also a country that had been investing in Venezuela and some of its state-owned enterprises as well. How should we consider China and all of this? Great question again, because China, and you've seen already, has come out and been very critical of what's going on because Beijing has been, quote-unquote, helping Venezuela. out since 2017. And Dave would firmly believe that Venezuela actually owes them for that. That is why

the bulk of Venezuelan oil, of course, other than the fact that it's also sanctioned, has been going to China because these are loan repayments. China is not just going to sit there and just be like, okay, the US is just going to come in and take all that oil away, right? So it is extremely complicated, and there are way too many parties involved in this. And that's why I really want to stress that while people are looking at what could be the future production of Venezuelan oil in the market, fundamentally, there's probably more risk to the downside for production than to the upside. Amrita Sen is the founder of Global Research Consultancy Energy Aspects.

Amrita, thank you so much for being with us on What's News. Thank you for having me. Coming up, we've got the rest of the day's news, including the start of a multimillion-dollar welfare fraud trial and a look at ICE's latest tactics to ramp up arrests. Those stories and more after the break. In potentially encouraging news for children with diabetes, French pharmaceutical company Sinoffi says the FDA has accepted a priority review to potentially expand the age range for its diabetes drug T-Zield. The Type 1 diabetes treatment is currently approved for children

8 and up, but in a medical first, Sanofi hopes to lower the drug's approval to 1-year-olds. Meanwhile, ICE officers have been handed a new tool to speed up arrests of immigrants suspected of being in the country illegally. The facial recognition app Mobile Fortify, which has access to several government criminal databases, has routinely featured in ICE arrests in recent months. Officials say the app has made arrests faster and more accurate, while the usage has raised concerns among privacy advocates who say it lacks proper oversight. According to a journal analysis, the government's spending on companies known to provide surveillance technology has jumped significantly in recent years, with over

$30 million in contracts awarded this year. And the first trial in Mississippi's $77 million welfare fraud scandal is set to begin this week. The start of the trial marks nearly six years since millions of dollars in federal aid given to the state under programs, including temporary assistance for needy families, were allegedly misused by several people, including a state official and nonprofit leaders. Funds instead went to expenses such as a downpayment on a home in a wealthy Jackson neighborhood, drug rehab at a luxury facility for a person paid by a nonprofit, as well as building a $5 million new volleyball stadium at a Mississippi University. And that's it for what's news for this Monday morning. Additional sound in this episode was from

Reuters. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer was Sandra Kilhoff, and I'm Luke Vargas with The Wall Street Journal. We will be back tonight with a new show. And as always, thanks for listening.