In an article, Paul Krugman criticizes Trump's plan for oil exploration in Venezuela.

247 - American economist Paul Krugman has critically assessed US President Donald Trump's strategy to expand oil exploration in Venezuela. In an article published on his Substack, Krugman argues that the plan is likely to fail for objective economic reasons, which the US government has ignored.

According to the economist, Trump met on Friday with energy sector executives to discuss investments in Venezuela. The meeting, which was supposed to be private, ended up being broadcast live by the White House. The government's expectation was to demonstrate support from the major oil companies, which did not happen.

Krugman reports that no executive committed to investing in the South American country. Some mentioned, in a generic way, possible increases in production, but without making concrete commitments. During the meeting, Trump even diverted the focus of the discussion to comment on a personal banquet hall project, which reinforced the awkward tone of the meeting.

The most direct assessment came from ExxonMobil CEO Darren Woods, who described Venezuela as "uninvestable" under current conditions. The statement provoked an immediate reaction from Trump. On Sunday night, the president stated he was "inclined" to prevent ExxonMobil from investing in the country. "I didn't like their response," he said.

Krugman argues that the lack of interest from companies is not an isolated incident. He points out that, the day before the meeting, the US government attempted to auction off more than 20 acres of public land in Colorado for oil and gas exploration, receiving no bids despite low prices. According to the economist, this demonstrates the exhaustion of the "drill, drill, drill" policy championed by Trump.

According to Krugman, most of the oil produced in the United States today comes from shale, whose extraction is only viable at high prices. The economist states that the breakeven price for new wells is around US$62 per barrel, while current prices are below that level, which discourages new investments.

In the case of Venezuela, the obstacles are even greater. Krugman explains that the country's reserves are composed mostly of heavy oil, which is expensive and complex to extract. He cites Professor David Levine of the University of California, Berkeley, who compares the consistency of Venezuelan oil to that of "cold peanut butter."

Furthermore, Venezuela's oil infrastructure is deteriorated. Estimates indicate that even a minimal recovery would require between US$10 billion and US$20 billion, while a return to 1990s production levels would demand investments exceeding US$100 billion.

The economist also draws attention to security risks. A day after the meeting, the United States embassy issued a warning about the actions of armed groups and listed risks such as arbitrary detentions, kidnappings, violence, and civil unrest, factors that discourage long-term investments.

According to Krugman, Trump's energy strategy was not defeated by environmental regulations, but by the basic logic of costs and profits. He argues that the president can continue promising increased production and lower prices, but the market itself has already demonstrated that the plan is unsustainable.