The $180 Billion gamble on Venezuela’s heavy crude oil

Plus: Warner Bros. drama, and the power struggle over AI

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Cheddar's Big Business This Week
January 08, 2026

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Early last Saturday morning, U.S. commandos abducted Venezuela’s sitting president, Nicolás Maduro, and his wife, Cilia Garcia, to stand trial in New York on drug-running charges. Then President Donald Trump announced the U.S. will be “running” Venezuela, and control the country’s oil exports, its main source of revenue. Trump said he’d make sure buyers pay market rate for the oil and that the proceeds go to help the Venezuelan people, one in four of whom are starving after a quarter-century of corrupt government. Trump and Secretary of State Marco Rubio say they’re counting on the country’s interim leader, former Vice-President and Maduro ally Delcy Rodriguez, to play ball with their plans. It’s not clear to what extent she and the rest of the country’s heavily militarized, authoritarian government will go along, but Rodriguez is a savvy political player: As foreign minister, she ensured Venezuela donated $500,000 to President Trump’s 2017 inauguration committee.

In outline, the Trump plan is this: As Venezuela sits on possibly the largest proven oil reserves in the world, the U.S. will spend either taxpayer dollars or encourage U.S. companies to spend their own money — a plan U.S. oil companies have rejected without taxpayer guarantees — to rebuild Venezuela’s collapsed oil infrastructure. With its naval blockade of Venezuela, the U.S. will determine which ships can leave the country carrying oil abroad, and will process the oil sales through offshore accounts and strangely, not via the U.S. Treasury. The money will buy U.S. food and supplies to feed Venezuela and restart its economy.

But here’s the challenge: First off, oil isn't the weapon it once was. The U.S. is a net exporter of oil and refined petroleum products, and with oil prices already below $60 a barrel, it doesn’t take much to bump it below $50, at which point it becomes unprofitable for oil companies to pump much of the oil in America’s reserves. Second, Venezuela’s oil is low-quality thick crude, laden with sulfur. Extracting the good stuff from the goop is expensive: It needs a steam pipe pumping superheated water and chemicals into the ground to melt the oil enough for it to flow into the standard extraction pipe of a well. Then it needs costly processing that requires more special chemicals in special refineries before it can be shipped abroad for final refining into gasoline, diesel, and other petroleum products. That’s why Venezuelan oil already trades at a discount of $13 to $25 a barrel compared to West Texas Intermediate or Brent crude. Canada’s own heavy tar sands oil trades at a $13-$15 a barrel discount, suggesting a future price band for Venezuelan oil.

Added to those challenges is the enormous investment needed to increase production — oil analyst firm Rystad estimates it will take $180 billion and at least a decade to restore Venezuela’s production to its peak of 3 million barrels a day, last seen in the early 2000s. Output is now estimated at about 820,000 barrels a day, or less than 1% of the less than 100 million barrels a day pumped around the world last year. So even at full capacity, Venezuela’s oil production won’t affect global production or supply. The markets reinforced that, with oil futures virtually unchanged this week. Sure, some observers have noted that U.S. refiners spent close to $100 billion in recent decades to accept heavy oil, the kind that comes from Venezuela, but that’s also coming in by pipeline from the tar sands of Canada. Moral arguments on the pro and con side for regime change in Venezuela aside, experts are finding it hard to see how the plan to exploit Venezuela’s oil makes business sense.

—Peter S. Green

Big Businesses mentioned this week:

This week, big business!

The usual suspects

The Warner Bros. logo sure has changed a bunch over the years…

  • WBD’s “just say no” moment: David Ellison and his dad Larry, the founder and CEO of Oracle $ORCL ( ▼ 1.7% ) , are not having much luck with their efforts to convince the board of Warner Bros. Discovery $WBD ( ▼ 0.7% ) to dump Netflix’s $NFLX ( ▼ 0.28% ) $83 billion bid for the Ellison-controlled Paramount Skydance’s $PSKY ( ▼ 0.16% ) more speculative but nominally bigger bid of about $108.4 billion. Even after Larry promised to backstop $40 billion of the huge debt pile Paramount would take on to buy Warner, the WBD board said on Wednesday that the offer is too risky. Among their objections: Paramount wants to halt WBD’s spin-off sale of its cable assets, and hasn’t agreed to pay WBD the $2.8 billion it would owe Netflix for breaking off the engagement and returning the ring. Paramount's latest bid offers “insufficient value,” including “an extraordinary amount of debt financing” that creates a risk the deal may not close, Samuel Di Piazza, the WBD board chair, said in a letter to shareholders. Then there’s the elephant in the room: politics. Donald Trump’s FCC boss, Brendan Carr, who told Congress his regulatory agency is not independent of the president, has indicated he’d try to block the Netflix bid, claiming it would give the streamer too much market power. One reason for the price gap: Netflix would come in after WBD spins off its cable and linear properties, including CNN, which Trump said needs a new owner. The Ellisons have already begun remaking Paramount's CBS News unit as a pro-Trump voice, most famously by appointing right-wing media disruptor Bari Weiss as editor in chief, and cancelling a 60 Minutes dive into conditions for deportees from the U.S. at a prison in El Salvador. Shares in $WBD ( ▼ 0.7% ) are up 172% in the past year, since it became clear that CEO David Zaslav would sell the company. Shares rose 0.3% on Wednesday. Oracle is up 19% in the past year, after a 37% plunge from a September high.

  • Can it: Budweiser’s Belgian parent Anheuser-Busch InBev $BUD ( ▲ 2.47% ) said it will spend $3 billion to buy back a 49.9% stake in its U.S. plants that make the cans that hold the King of Beers. The seven plants in six U.S. states were sold to Apollo Global Management in 2020, for about the same price, as part of a plan to pay down debt it racked up buying SABMiller. Now, cash flow is stronger, and AB InBev wants to be sure someone can hold its beer.

  • Advisedly not: JPMorgan Chase $JPM ( ▲ 0.93% ) says it’s planning to drop the use of all proxy advisory firms, and replace them with its own AI service to determine how to vote shares in more than 3,000 public companies. The firms, including ISS and Glass Lewis, analyze a company’s activities and recommend how shareholders should vote on board members and other actions that come up at annual meetings and special shareholder meetings or votes. The firms often look critically at incumbent boards and have often irked CEOs and boards who dislike the scrutiny. Last month,  President Trump called on the SEC to investigate proxy advisers. JPM chief Jamie Dimon has been a  vocal critic of theirs, too, saying earlier this year they “should be gone and dead.” Definitely on the agenda at JPM’s next annual meeting: Dimon’s pay package. The chief took home about $770 million last year, as the bank’s share price rose 34%, putting the 69-year-old exec’s net worth at $2.4 billion, according to Forbes. 

  • Bad Apple? Goldman Sachs $GS ( ▼ 0.51% ) says it finally found someone to take Apple’s $AAPL ( ▼ 0.5% ) disappointing credit card business off its hands: JPMorgan Chase $JPM ( ▲ 0.93% ) , which has its own vast credit card issuing business. Goldman has been desperate to exit the card business, after failing with its online consumer banking businesses. The firm shop lost $3 billion from 2020 to 2023 on the Apple Card and its online bank, Marcus. After announcing plans to kill Marcus and sell the card, Goldmann's stock shot up 34% in a year. The JPM deal will take about two years to fully close, and includes $20 billion in consumer debt.

  • Boeing’s Baaaaack, Baby! Alaska Airlines $ALK ( ▼ 2.35% ) , whose 737 popped a door in 2024, sending Boeing’s stock crashing, and ending the career of former CEO David Calhoun, has given the U.S. planemaker a massive boost, ordering 110 new passenger jets, including 105 737’s, this time in the forthcoming Max10 configuration. The other five planes are long-haul 787-10 Dreamliners, which will likely be used on new routes to South Korea and Italy. Alaska has 413 planes in its fleet. Boeing has more than 6,000 aircraft on backorder, so the company is looking healthy again to investors. Boeing shares are down only about 8% since the blowout, but up 67% from an April low.

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Car talk

Don’t say “number 2.”

  • Tesla is number two in the EV market, now. The EV maker’s sales fell 16% in the third quarter, and 9% for the full year, falling to 1.64 million cars worldwide from 1.8 million in 2024, largely because the federal government ended its $7,500-a-car EV subsidy. Meanwhile China’s BYD $BYDDY ( ▲ 0.41% ) (the name stands for Build Your Dream) said it sold 2.26 million electric cars in 2025, up 28% from 2024, under founder and CEO Wang Chuanfu. Still, if Tesla can hold on, the U.S.market will grow. Analysts Cox Automotive expect EVs to make up 8.5% of the U.S.new car market this year, doubling by 2030.

  • There’s a (smaller) Ford $F ( ▲ 4.66% )  in your future: Cutting back on EV production didn't hurt Ford’s bottom line. Surging sales of lower-priced trucks, including the Maverick and Ranger, saw the total number of vehicles Ford sold in the fourth quarter jump 2.7% to 545,216. A 5.4% rise in truck sales made up for a 2.5% drop in SUV sales. Maverick sales climbed 54%, while Ranger sales jumped 46%. Ford’s share price is up 41% in the past year. Curiously, despite inflation, tariffs, and job losses, new car sales in the U.S. are up slightly in 2025. Why? Because the rich are spending big. Cox analysts say Families earning $150,000 a year or more now buy 43 % of new cars, up from one-third in 2019. Households earning less than $75,000 are buying about 25% of vehicles sold, down from more than a third in 2019.

The tech stack

Not pictured: Nvidia CEO Jensen Huang with his board of directors.

  • It’s Jensen Huang’s world, and we’re just living in it. The Nvidia $NVDA ( ▼ 2.29% ) CEO is headlining the vast Consumer Electronics Show in Las Vegas this week. At one event, Huang said he’s churning out advanced H200 AI chips for Chinese customers as Nvidia tweaks “the last details” of an export agreement with the Trump Administration. Despite concerns that the chips could give China an edge in AI development, Trump agreed Nvidia could export the chips as long as he gave the government 25% of the profits from China sales. The Chinese market may be short-lived for Nvidia, as the country's domestic chipmaking surges. A report by consulting firm Frost & Sullivan says Chinese chips would go from being backups to “core pillars” of China’s AI industry by 2030. On Monday Huang said Nvidia has developed a family of open AI models called Alpamayo, that mirror the human-like thinking needed for self-driving cars. Will it catch up with Tesla $TSLA ( ▲ 0.9% ) , or even beat Waymo? Nvidia is linking up with Mercedes $MBGAF ( ▼ 0.89% ) at first, but leaving carmakers to develop the hardware.  Musk said this week that he’s “not losing any sleep” over Nvidia’s newly-unveiled autonomous car tech:

  • Powering hungry: Huang also unveiled a new and faster AI server system. It’s called the Vera Rubin (named for a pioneering female astronomer). All its new chips will need a lot of electricity, and Nvidia, along with German engineering giant Siemens $SIEGY ( ▼ 1.86% ) are investing in a BIll Gates-backed nuclear fusion startup called Commonwealth Fusion Systems. CFS also signed a deal to sell Google $GOOGL ( ▲ 1.08% ) power from the first commercially viable fusion plant, which it says it wants to bring online some time in the 2030s.

  • Power struggles: Big tech and the American consumer are locked in a power struggle over… (you guessed it) power. As electricity rates rise across the country, most notably in the Mid-Atlantic -Midwest region whose energy flows are governed by the 13-state PJM interconnection, local governments are demanding that new data centers be prepared to switch to backup power or power down to avoid power cuts or blackouts. But the data centers say they can’t, or won’t, unplug. “It’s a high-stakes fight, because hundreds of billions of dollars or trillions of dollars of capital are on the line,” Michael Webber, an engineering professor at the University of Texas at Austin and former chief technology officer at investment firm Energy Impact Partners told the Wall Street Journal. “Power is the critical bottleneck.”

Trumplandia

  • What’s the fun of being president if you can’t move the stock market? On Wednesday Donlad Trump rattled the stock market by declaring that he’d ban institutional investors from buying more single-family homes, and told defense contractors to cut their CEO salaries to $5 million because they’re charging too much and taking too long to build or repair weapons for the U.S.military. Contractor Raytheon $RTX ( ▲ 0.53% ) was singled out: “Either Raytheon steps up, and starts investing in more upfront Investment like plants and equipment, or they will no longer be doing business with the Department of War,” Trump wrote on his social media platform Truth Social. He told the contractors that they need to build more plants in the U.S.,and he’d bar them from stock buybacks, even though such threats may technically be beyond his authority.

  • Trump also claimed he’s planning to boost defense spending by 50% next year, to $1.5 trillion from the currently budgeted (but not yet spent) FY 2026 budget of $1.1 trillion. He also aims to pay down the national debt and pay a dividend to “moderate income Patriots,” arguing that tariffs will cover the costs. The math may not pan out, though, because tariffs brought in about $124.5 billion in revenue between January 2025 and September 2025 before accounting for income and payroll tax offsets, while total federal revenue for the 2025 fiscal year (ending on Sept. 30) was $5.23 trillion, and total spending was $7.01 trillion, leaving a deficit of $1.78 trillion. With the national debt at over $38 trillion, interest payments alone are over $1 trillion a year. Still, the mere whiff of more defense spending boosted a raft of defense stocks in early trading Thursday. Lockheed Martin $LMT ( ▲ 4.29% ) and General Dynamics $GD ( ▲ 1.97% ) swept past price targets while other defence stocks rose, including Heico $HEI ( ▲ 0.19% ) , L3Harris $LHX ( ▲ 5.42% ) and even Raytheon $RTX ( ▲ 0.53% ) . Movers included Kratos Defense $KTOS ( ▲ 13.78% ) , AeroVironment $AVAV ( ▲ 8.7% ) , Northrop Grumman $NOC ( ▲ 2.43% ) , and Palantir $PLTR ( ▼ 2.5% ) .

  • Housing issues. Back on the home front, Trump seems to be reacting to voter anger in some red states over the rising price of housing. The Government Accountability Office found in 2024 that large institutions owned 25% of rental homes in Atlanta and 18% in Charlotte. Home prices are up more than 50% across the nation since 2019, and the National Association of Realtors says the median existing-home price in November rose to $409,200, up 1.2% in a year. “People live in homes, not corporations,” Trump posted on his social media accounts. But some housing experts are calling out Trump’s post as disingenuous. Under Trump, the federal Dept. of Housing and Urban Development has rolled back many protections for individual homebuyers, including “First Look” requirements that gave owner-occupants, public entities, and nonprofits a chance to buy distressed properties and mortgages before they're available for investor purchase. "An administration that wants to prioritize owner-occupants could restore those protections," one former HUD official told USA TODAY’s Andrea Riquier.

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.