Key takeaways
Venezuela has the world’s largest proven oil reserves, estimated at about 303 billion barrels, but output remains far below past peaks.
Cheaper energy could improve miner margins globally in theory, especially in regions where long-term power contracts are available.
Any meaningful rebound in production is widely viewed as a multi-year process, shaped by infrastructure limits and policy and sanctions uncertainty.
Venezuela’s grid reliability issues and past government actions affecting mining add localized risk to any “cheap power” narrative.
Venezuela is the kind of country energy traders obsess over on paper. It sits on about 303 billion barrels of proven oil reserves, the largest stockpile on record in many industry tallies.
However, proven reserves are not the same as output. Venezuela’s production has fallen to around 1 million barrels per day, far below the multimillion barrels per day (bpd) levels it once sustained. Analysts and industry outlets point to years of underinvestment, degraded infrastructure and the practical difficulty of extracting and transporting extra-heavy crude.
That’s why our recent report, citing Bitfinex analysts, frames Venezuela as a long-horizon variable for Bitcoin (BTC) miners. If greater Venezuelan supply eventually pressures energy costs, miner margins could improve. However, the same analysts stress that any meaningful output growth would likely take years.
Did you know? Bpd means “barrels per day,” a standard unit used in oil markets to express how many barrels of oil are produced or consumed in a single day. You may also see bbl/d, which refers to the same concept. By this measure, using the Energy Information Administration’s “total oil” definition, the United States had the world’s largest oil output at 21.91 million bpd in 2023.
How power prices affect mining profits
Bitcoin mining economics largely come down to revenue per unit of hashpower minus the cost of running that hashpower.
Miners often track revenue through “hashprice,” a metric popularized by Luxor that estimates the daily value of 1 terahash per second of hashing power before a miner’s specific costs. On the cost side, electricity is widely treated as a dominant operating input.
The University of Cambridge’s mining methodology notes that power represents a substantial share of mining operating costs, which is why operators focus so heavily on power efficiency and facility overhead.
This is where oil can matter, even indirectly. In many regions, wholesale power prices are influenced by fuel markets and generation costs. Miners who can secure predictable pricing through long-term power agreements are generally observed to have steadier margins than those exposed to spot-price volatility.
A crypto-mining legal primer on power purchase agreements (PPAs) describes pricing and contract tenure as among the most heavily negotiated terms in these deals.
Reserves don’t automatically turn into barrels
Venezuela’s headline number, 303 billion barrels of proven reserves, is real. It is why the country continues to resurface in energy forecasts.
However, proven reserves describe resource size, not how quickly a country can convert that resource into steady export volumes. Recent estimates put Venezuela’s output at 1 million barrels per day, down sharply from the more than 3 million bpd it produced in earlier decades.
A core constraint is geology and logistics. Much of Venezuela’s oil is extra-heavy, especially in the Orinoco Belt, which makes it harder to lift, transport and process. It often requires diluents such as naphtha to thin the crude so it can move through pipelines and be handled by refineries.
Then there is the state of the industry itself. The sector has been shaped by years of underinvestment and operational decline, alongside legal and sanctions-related uncertainty that complicates large-scale capital returns.
Even optimistic scenarios tend to treat a meaningful production recovery as a multi-year project.
Did you know? Oil can become extra heavy after it forms. In places like the Orinoco Belt, oil migrated into shallow, cooler reservoirs where microbes and water stripped out lighter hydrocarbons over millions of years, leaving behind a thick, dense crude.
The three pathways linking Venezuelan oil dynamics to mining costs
A) The global pricing channel (indirect)
This idea is a long-horizon one. If Venezuelan supply becomes meaningfully easier to bring to market over time, it can feed into broader expectations about fuel availability and costs.
In markets where fossil generation sets the marginal price of electricity, fuel prices can influence wholesale power prices even when renewables supply a large share of energy. Research briefs from the UK Parliament explain how marginal-cost pricing often allows gas-fired power to set the wholesale electricity price.
Reporting by Reuters on power markets also routinely points to fuel costs, especially gas, as a major driver of wholesale electricity swings.
B) The contracted power channel (more direct, but slower)
If investment and operations stabilize, the bigger potential impact for miners would come from the ability to contract reliable power over multi-year timelines.
However, this depends on work that would take years, including restoring upstream output, managing extra-heavy crude logistics and rebuilding the surrounding energy and industrial base.
C) The stranded energy/flare gas channel (miner-native)
Oil-field development can increase the need to manage associated gas.
In other regions, companies and case studies have described using otherwise flared gas to generate electricity for onsite Bitcoin mining. Texas A&M University, for example, has profiled a flare-gas mining project. Firms such as Crusoe have also publicly described deploying mobile data centers near oil and gas infrastructure.
Why future energy plans matter to miners today
Even if Venezuela’s output recovery is a multi-year story, miners often plan on multi-year cycles as well, since both hardware purchases and power agreements are long-term commitments.
Public miners commonly depreciate mining rigs over three years in their financial reporting. This serves as a useful proxy for how frequently fleets are expected to be refreshed.
On the energy side, power purchase agreements in industrial markets are often structured over multi-year terms to provide price stability and support financing, according to a 2025 overview of PPAs by Pillsbury.
Ultimately, expectations shape what counterparties are willing to sign, how projects are financed and where capacity gets built. Policy can reprice those expectations quickly. Reuters reported that Laos, after attracting miners with cheap hydropower, planned to end electricity supply to crypto miners by early 2026 to redirect power elsewhere.
Grid reliability and policy risk
The first blocker is simply power reliability. Venezuela has suffered repeated large-scale outages in recent years, including a nationwide blackout on Aug. 30, 2024, that affected Caracas and other regions before power was gradually restored later that day. For energy-intensive industries, uptime often determines whether a site is profitable.
The second blocker is policy and enforcement risk, which has been unusually explicit for mining. In May 2024, Venezuela’s Ministry of Electric Power announced a plan to disconnect “all cryptocurrency mining farms” from the national electricity system as part of a load-control effort, according to reporting.
A report from the Wilson Center in April 2024 also described registered miners being cut off from the grid amid a broader shake-up of Venezuela’s crypto regulator, SUNACRIP.
Add in uncertainty around Venezuela’s energy sector investment environment, which the Financial Times links to underinvestment, governance issues and sanctions constraints, and the picture becomes one of cheap power that may be difficult to contract and sustain.
The bottom line for miners
Venezuela’s reserves matter to miners mainly as a long-duration energy variable.
Any recovery is likely to be gradual, constrained by decaying infrastructure, legal uncertainty and the reality that much of Venezuela’s crude is heavy and operationally demanding.
Analysts have outlined timelines measured in years, with estimates ranging from modest gains over the next two to three years to much longer horizons for a true return to multimillion bpd output.
So, what is worth tracking?
Sustained production growth, not a single strong month
Evidence that heavy-oil logistics constraints are easing
Bankable multi-year power contracts becoming realistic
Clearer and more stable policy toward mining following prior grid disconnection announcements.