Business

Senior figures from across the UK’s night-time economy have hit back at suggestions that forthcoming business rates relief will apply only to pubs, warning that such a narrow approach risks devastating the wider nightlife and cultural sector.

Industry leaders say recent briefings implying pubs could be singled out for protection ignore the interconnected ecosystem that underpins Britain’s evening economy, including nightclubs, bars, casinos, theatres, live music venues and late-night cultural spaces,  all of which are facing steep cost increases from April 2026.

According to sector estimates, business rates across the night-time economy are set to rise by an average of 76%, with half of venues facing increases of 50% or more. Some operators are bracing for hikes of between 100% and 200%, a level many say is simply unmanageable, particularly for independent businesses operating on tight margins.

Michael Kill, chief executive of the Night Time Industries Association, said framing the issue as a pubs-only problem was both misleading and damaging.

“The suggestion that this is ‘just pubs’ is deeply frustrating,” he said. “Pubs matter, but they are only one part of the nightlife ecosystem. Casinos, clubs, theatres, bars and live music venues all rely on each other to thrive. If one part collapses, the damage spreads quickly.”

Kill warned that rate increases of this scale threaten jobs, cultural output and the infrastructure that underpins the UK’s global reputation for nightlife and entertainment. “If these venues fail, we lose far more than buildings, we lose livelihoods, culture and the social fabric of our towns and cities,” he added.

Sacha Lord, chair of the Night Time Industries Association, said while reports of relief for pubs were welcome, they fell far short of what the sector needs.

“This is a step in the right direction, but it doesn’t go far enough,” Lord said. “Helping one part of hospitality while leaving the rest exposed would be totally unfair. Independent restaurants, clubs and venues are already closing in droves. The chancellor needs to act for the whole sector.”

Operators point to mounting evidence of the strain facing non-pub venues. A city-centre nightclub facing a 120% increase in its rates bill has warned its closure would hit surrounding bars, restaurants and suppliers that depend on its footfall. An independent theatre has seen its rates more than double, putting performances and creative jobs at risk, while a regional casino expects a 100% increase that could undermine long-term employment.

Across the country, independent bars, music venues and late-night operators report increases of up to 200%, raising fears that many will not survive beyond next spring without intervention.

Industry leaders are now calling for urgent government action to extend business rates relief across the entire night-time economy. Without it, they warn of widespread job losses, particularly among young people,  the collapse of independent cultural venues, and lasting damage to Britain’s creative and hospitality industries.

“The idea that this is just about pubs is dangerously simplistic,” Kill said. “Independent venues are most at risk, and April 2026 is a tipping point. Without decisive action, the UK’s social, cultural and economic heartbeat is in real danger.”

Read more:
Nightlife leaders warn business rates relief must go beyond pubs

Donald Trump has never been shy about his favourite economic weapon. In his pre-Christmas address to the nation, the US president once again made clear that tariffs remain central to his vision for American prosperity.

While supporters argue that tariffs are reviving domestic industry, lifting wages and restoring economic sovereignty, critics remain unconvinced. What is no longer in dispute, however, is that Trump’s tariff regime has already reshaped the global economy, and will continue to do so well into 2026.

According to the International Monetary Fund (IMF), the cumulative impact of tariff measures is one of the key reasons global growth is now forecast to slow to 3.1 per cent in 2026, down from a pre-Covid average of 3.7 per cent. A year ago, the IMF had expected global growth of 3.3 per cent.

Kristalina Georgieva, the IMF’s managing director, has described the situation as “better than we feared, worse than it needs to be”. While a full-scale trade war has been avoided, growth remains too weak to meet rising expectations around living standards, employment and economic security.

Maurice Obstfeld, a former IMF chief economist and now at the Peterson Institute for International Economics, argues that the damage from tariffs has been contained largely because most countries avoided aggressive retaliation.

China was the notable exception, and even there, the US rapidly softened its stance following forceful counter-measures from Beijing. “We avoided a trade disaster,” Obstfeld says. “But we still ended up with more trade restrictions than when Trump returned to office.”

Five rounds of talks later, tariffs and trade barriers between the world’s two largest economies remain higher than at any point in recent history, creating lasting friction across global supply chains.

Rather than triggering an immediate downturn, tariffs have gradually increased costs and uncertainty for businesses. Planning long-term investment has become harder, while companies face constant risk that exemptions or rules may change overnight.

Ironically, the many loopholes built into US tariffs have softened their economic impact, but at the cost of predictability. “Exemptions lower the effective tariff rate,” Obstfeld notes, “but they also introduce huge uncertainty over who qualifies and for how long.”

This helps explain why the United Nations Conference on Trade and Development (UNCTAD) estimates global trade still grew by 7 per cent last year, reaching more than $35 trillion. Lower interest rates, a weaker dollar, creative supply-chain workarounds and selective tariff carve-outs have all played a role.

The US economy has so far shrugged off much of the disruption. Growth reached 4.3 per cent between July and September, the strongest pace in two years,  underpinned by consumer spending and massive investment in artificial intelligence.

Aditya Bhave, senior economist at Bank of America, believes the US remains “very resilient”, though he warns tariffs have likely added up to half a percentage point to inflation. With consumption accounting for more than a quarter of global GDP, any slowdown in US spending would have global consequences.

Elsewhere, inflation trends are mixed. The eurozone has stabilised near target at 2.1 per cent, while the UK and US remain above central bank comfort levels, keeping pressure on household finances and interest-rate policy.

Several flashpoints loom large over the year ahead. The renegotiation of the USMCA trade deal, EU ratification of a long-delayed South American agreement, and a US Supreme Court ruling on the legality of Trump’s tariffs could all reshape trade flows.

Energy prices will also be pivotal. Goldman Sachs expects Brent crude prices to fall around 8 per cent this year, easing inflationary pressure. A gradual reopening of Red Sea shipping routes could further reduce global transport costs, though risks remain elevated.

China continues to cast a long shadow. Trade between Beijing and Washington fell for a third consecutive year in 2025, and tensions over rare earths, semiconductors and industrial overcapacity remain unresolved.

James Zimmerman, chair of the American Chamber of Commerce in China, says expectations for progress at a planned Trump-Xi summit in April are “low”, but ongoing dialogue is essential. “Beijing wants a fair chance to compete,” he says, “but the over-emphasis on security concerns is creating deep mistrust on both sides.”

Despite bold rhetoric about re-industrialisation, US manufacturing employment has barely moved, slipping slightly below 12.7 million workers. Yet tariffs remain politically entrenched.

Obstfeld argues the US economy has grown despite tariffs, not because of them, thanks to consumer resilience and the AI investment boom. Still, he sees no sign of a policy reversal.

“Tariffs aren’t going away,” he says. “They will remain a central part of economic policy and political debate.”

As 2026 unfolds, the global economy is unlikely to collapse under the weight of tariffs, but it will continue to bend, fragment and adapt around them, with uncertainty now the defining feature of global trade.

Read more:
How tariffs will continue reshaping the global economy in 2026

The government has spent more than £30,000 of public money so far on rebranding England’s nationalised rail services under the new Great British Railways banner, amid mounting scrutiny over value for money.

Great British Railways, the brand under which rail services in England will be brought into public ownership, was formally unveiled last month by Heidi Alexander. The new identity features a modernised version of the familiar double-arrow symbol last used when Britain’s railways were publicly owned under British Rail.

Alongside the logo, a new red, white and blue livery is due to be applied to trains and other passenger-facing materials. Alexander insisted the move “isn’t just a paint job”, arguing that it signals a reset for a rail system that has frustrated passengers for years.

However, a Freedom of Information request obtained by Sky News shows that £32,400 has already been spent on the design process. More than £27,000 of that total, excluding VAT, went on audience research and accessibility testing carried out by a specialist agency.

The spending also covered mock-ups for a future Great British Railways app and a set of poster designs, although the Department for Transport has yet to begin procurement for the app itself.

While around half of the UK’s major rail operators are now under public ownership, the first trains to carry the new Great British Railways livery are not expected to appear until the spring.

The Department for Transport said the full cost of repainting trains and rebranding stations has not yet been determined. Ministers have stressed that the new branding will be rolled out gradually, largely coinciding with routine maintenance schedules, rather than through an immediate and costly overhaul.

The department also declined to provide any estimate for the cost of developing the proposed Great British Railways app, which has been billed as a future “one-stop shop” for rail passengers. Officials indicated that key policy decisions remain outstanding and that no formal procurement process has yet begun.

The spending has drawn criticism from campaign groups, including the TaxPayers’ Alliance, which warned that the branding bill could be “the tip of a costly rail renationalisation iceberg”.

John O’Connell, the group’s chief executive, said the rebrand raised questions about priorities at a time when passengers continue to face disruption and high fares. “Spending tens of thousands on logos and focus groups, without clarity on the final cost of repainting trains or building new digital platforms, suggests a casual approach to taxpayers’ money,” he said.

Ministers have pushed back against those claims, arguing that the branding work has largely been done in-house and that accessibility testing was a legal necessity.

The rebrand comes as Prime Minister Keir Starmer seeks to underline Labour’s commitment to easing the cost-of-living crisis. Frozen rail fares in England have been cited as one of the early ways households will “begin to feel positive change”.

A Department for Transport spokesperson said: “To maximise value for money, the Great British Railways brand was designed in-house and will be rolled out gradually, rather than through an expensive, all-at-once rebrand. As with any new public-facing identity, focus groups – including those with accessibility needs – were essential to ensure compliance with accessibility legislation.”

While the initial costs remain modest in the context of the rail budget, the long-term price tag of rebranding Britain’s nationalised railways is likely to remain under close scrutiny as the Great British Railways programme gathers momentum.

Read more:
Great British Railways rebrand costs pass £30,000 as rollout gathers pace

The government is expected to announce a partial U-turn on looming business rates increases for pubs within days, amid growing alarm over the financial pressure facing the hospitality sector.

According to Sky News, ministers are preparing a targeted rescue package that would shield pubs from steep hikes triggered by business rates revaluations and the withdrawal of Covid-era reliefs. However, the move is understood to apply only to pubs, leaving other hospitality businesses such as hotels, restaurants and leisure venues exposed to potentially severe cost increases.

The development follows warnings that some hospitality venues face business rates bills rising by more than 100 per cent over the coming years, as temporary pandemic support unwinds and rateable values are reassessed.

Sky News’ deputy political editor Sam Coates said there was growing unease inside government about the scale of the impact. He reported that colleagues of Rachel Reeves were “not happy” about the situation, as pressure mounts from MPs and industry figures concerned about closures, job losses and declining high streets.

In November’s Budget, the chancellor announced a significant overhaul of the business rates system, including the introduction of a new band for retail, hospitality and leisure. This marked the formal end of the relief scheme first introduced in 2020 at the height of the pandemic.

While ministers argue that the new framework leaves hospitality businesses better off than before Covid, industry leaders have consistently warned that it fails to reflect the structural disadvantage faced by bricks-and-mortar operators, particularly when compared with online-only competitors.

Pubs, restaurants and hotels remain highly exposed because of their reliance on physical premises, high energy usage and labour-intensive operations. Many have already been hit by rising wages, higher employer national insurance contributions and subdued consumer demand.

The prospect of a pubs-only intervention has raised concerns about fairness within the sector. Hotels and other hospitality operators fear they will be left carrying the burden of rate increases at a time when margins remain thin and recovery fragile.

Coates also reported that parts of the business community have been privately warned by government figures to avoid public protest if they want concessions. One industry source told Sky News that ministers had pointed to farmers as an example of “good, fair negotiators” who secured policy changes without mounting a high-profile campaign.

If confirmed, the pubs-focused rescue package would represent a significant political shift after months of resistance to calls for broader reform. However, it risks deepening divisions within hospitality, with many operators questioning why one part of the sector should be protected while others face potentially crippling cost increases.

Read more:
U-turn on pub business rates hike expected within days, ministers signal

Berkshire Hathaway has formally drawn a line under one of corporate America’s most famous pay traditions, ending the $100,000 annual salary paid to Warren Buffett for more than four decades.

Greg Abel, who took over as chief executive on January 1, will receive an annual pay package of $25 million, a sharp break from the frugal compensation model that long defined the Omaha-based investment giant.

Abel, 63, had already been one of the highest-paid executives at Berkshire before stepping into the top job. In 2024, while serving as vice-chairman overseeing the group’s non-insurance operations, he earned $21 million. His new salary reflects both his expanded responsibilities and a more conventional approach to executive pay at the world’s most closely watched conglomerate.

Buffett, now 95, remains chairman of Berkshire and continues to rank among the world’s wealthiest individuals, with an estimated net worth of around $150 billion, according to the Bloomberg Billionaires Index. He built Berkshire over more than 60 years into a sprawling $1 trillion-plus empire spanning insurance, railroads, energy, manufacturing and retail, including brands such as Geico and BNSF Railway.

Unlike most corporate leaders, Buffett’s wealth has overwhelmingly come from his equity stake rather than his salary. Berkshire has delivered a compounded annual gain in market value of nearly 20 per cent since 1965, according to its most recent shareholder letter, and Buffett still owns more than a third of the company’s Class A shares.

Abel is also heavily invested in the business. He owns roughly $171 million worth of Berkshire stock and, in 2022, sold his 1 per cent stake in Berkshire Hathaway Energy back to the group for $870 million, further cementing his long-term alignment with shareholders.

Buffett has long been vocal about executive pay, repeatedly warning against what he described as “irrational” compensation systems. While he has said he has no objection to paying generously for outstanding performance, he has been critical of pay structures that reward mediocrity or encourage executive envy.

Speaking at Berkshire’s annual meeting in 2017, Buffett said he hoped his successor would already be wealthy and motivated by stewardship rather than the pursuit of ever-higher pay. He has also criticised mandatory disclosures comparing chief executive pay with that of average workers, arguing they often fuel upward pressure on salaries rather than restraint.

The move to a $25 million salary for Abel marks a symbolic shift for Berkshire as it enters a new era — one that balances its unique culture with the realities of succession at one of the world’s most valuable companies.

Read more:
Berkshire Hathaway ends $100,000 CEO salary as Warren Buffett’s successor earns $25m

Donald Trump has launched an extraordinary attack on America’s largest defence contractors, threatening to block dividends and share buybacks unless they accelerate weapons production, as he prepares a dramatic expansion of US military spending.

In a post on his Truth Social platform, the US president warned defence firms that he would no longer tolerate what he described as sluggish delivery of military equipment during “troubled and dangerous times”. His comments came ahead of plans to increase the US defence budget for 2027 by 50 per cent, taking annual military spending to $1.5 trillion.

Trump accused defence executives of prioritising shareholder returns and personal remuneration over national security, describing pay packages across the sector as “exorbitant and unjustifiable”. He suggested executive compensation should be capped at $5 million and said companies should redirect capital currently used for dividends and share buybacks into boosting production capacity.

“Military equipment is not being made fast enough,” Trump wrote. “It must be built now with the dividends, stock buybacks and over-compensation of executives, rather than borrowing from financial institutions or getting the money from your government.”

The remarks marked a rare and direct presidential intervention in capital allocation decisions on Wall Street. US defence stocks initially fell sharply in response. Shares in Lockheed Martin, Northrop Grumman, RTX and General Dynamics all declined during afternoon trading. Losses were later pared back after Trump confirmed his intention to significantly raise defence spending.

Trump singled out Raytheon, a subsidiary of RTX, accusing it of being “the least responsive to the needs of the Department of War”. He warned that if the company wanted future government contracts, it would be barred from carrying out further share buybacks.

The president did not clarify how such restrictions would be enforced, raising questions over the legal and regulatory mechanisms available to the White House. Analysts noted that buybacks and dividends are deeply embedded in the financial strategies of established defence firms, many of which rely on consistent shareholder returns to support their valuations.

Lockheed Martin, for example, raised its dividend for the 23rd consecutive year in October to $3.45 per share, while also authorising up to $2 billion in share repurchases, taking its total buyback commitment to more than $9 billion.

Trump’s criticism comes amid long-running concerns over delays and cost overruns in major US defence programmes. Lockheed’s F-35 fighter jet, one of the most expensive weapons systems ever developed, has faced repeated schedule slippages and rising costs. Meanwhile, Northrop Grumman’s Sentinel intercontinental ballistic missile programme, intended to replace the ageing Minuteman III system, is now projected to be 81 per cent over budget, according to the US military.

Neither Lockheed Martin nor Northrop Grumman responded to requests for comment.

For defence investors and contractors alike, Trump’s intervention underlines the growing political risk surrounding the sector, even as government spending is set to rise sharply. While a larger military budget promises long-term revenue growth, tighter scrutiny over executive pay, capital returns and delivery timelines could fundamentally reshape how defence firms operate in the years ahead.

Read more:
Trump threatens defence firms over slow weapons production

UK housebuilding has fallen to its weakest level since the Covid-19 lockdowns of 2020, underlining the scale of the challenge facing ministers as they attempt to revive construction and meet housing targets.

New data from S&P Global shows activity across the UK construction sector continued to shrink in December, with housing and commercial construction work both contracting at the fastest pace in more than four years.

The survey of purchasing managers found that housebuilding and commercial construction declined at their sharpest rate since May 2020, when building sites were forced to shut during the first national lockdown. Civil engineering activity also fell, although at a slower pace than in November.

Overall, the UK construction Purchasing Managers’ Index (PMI) edged up slightly to 40.1 in December, from 39.4 the previous month. However, the reading remains well below the 50 mark that separates growth from contraction, signalling another month of falling activity.

The downturn has now stretched to 12 consecutive months, making it the longest unbroken period of contraction in the construction sector since the global financial crisis of 2007–09.

S&P Global said fragile client confidence continued to weigh heavily on workloads, with many firms reporting that investment decisions had been delayed in the run-up to November’s Budget. Although some of that uncertainty has now lifted, the knock-on effect is still being felt in weak order books.

There were, however, early signs of stabilisation. Business expectations for the year ahead rose to a five-month high in December, suggesting that confidence may be starting to recover as policy clarity improves.

Tim Moore, economics director at S&P Global Market Intelligence, said: “UK construction companies once again reported challenging business conditions and falling workloads in December, but the speed of the downturn moderated from the five-and-a-half-year record seen in November. Many firms cited subdued demand and fragile client confidence. Despite a lifting of Budget-related uncertainty, delayed spending decisions were still contributing to weak sales pipelines at the close of the year.

“By sector, the fastest reductions in activity were seen in housing and commercial construction since May 2020, while civil engineering recorded a slower pace of decline.”

The data adds to concerns that the government’s ambitions to accelerate housebuilding and expand social housing remain at risk, particularly while high interest rates, weak developer confidence and constrained investment continue to hold back new projects.

Read more:
UK housebuilding sinks to deepest slump since Covid lockdowns

Sir Stelios Haji-Ioannou, the entrepreneur behind easyJet, is offering ambitious young business owners the chance to secure up to £150,000 in funding as the third annual Stelios Awards for Young Entrepreneurs officially open in the UK.

More than 30 years after founding easyJet at the age of just 27, Sir Stelios has built an “easy” brand empire spanning more than 200 businesses, from budget airlines and hotels to storage, shipping and retail. Now, through the Stelios Philanthropic Foundation, he is backing the next generation of founders with £300,000 in cash grants designed to help scale high-growth UK start-ups.

The overall winner will receive £150,000, with second and third prizes of £100,000 and £50,000 respectively. Unlike many awards and competitions, the payments are cash grants rather than equity investments or loans, allowing founders to retain full control of their businesses.

“This is part of my way of giving back to society,” Sir Stelios said. “I want to encourage young entrepreneurs aged 34 or under to create and grow start-ups in the UK, which to my mind is the best way to generate new jobs and spread prosperity.”

The competition is open to founders aged 34 or under who own and run UK-registered businesses generating at least £500,000 in annual revenue. The threshold has been raised from £200,000 in previous years after a surge in high-quality applications, with 180 entries submitted in the last round alone.

Sir Stelios said he would be focusing on fundamentals rather than hype. “It will be the numbers – is it a good profitable business, is it growing and does it employ lots of people?” he said. “Due to my own background, I would rather reward consumer-facing businesses because they are more relatable and better known.”

Last year’s winner, Ayan Mohamed, exemplifies the kind of entrepreneurial drive the awards aim to support. She founded Digitech Oasis, a Manchester-based company providing autonomous robotic solutions, after teaching herself to code while studying business at university. The prize money helped accelerate growth and create new jobs in the region.

“These awards are incredibly useful to a young British entrepreneur like me,” Mohamed said. “The funding has been vital, but the recognition and credibility that comes with being associated with Sir Stelios has also been a huge boost.”

Beyond the financial support, winners also gain something harder to quantify: access to Sir Stelios himself. He remains actively involved with previous winners, offering mentoring and advice as they scale.

“I am available to them and happy to help,” he said. “It’s very rewarding to see what founders do with the money – and it’s a two-way learning process. Young entrepreneurs know things I don’t, especially about social media.”

Applications close on 23 February 2026, with winners to be announced at a hybrid ceremony in London on 31 March 2026. Sir Stelios has a simple message for potential applicants: “You should apply. This is not just a medal, it’s real money that will help your business.”

Read more:
Young entrepreneurs invited to pitch for £150,000 prize from easyJet founder Sir Stelios

Elon Musk’s artificial intelligence company xAI has secured $20bn (£15.7bn) in fresh funding, pressing ahead with its expansion plans even as its flagship chatbot, Grok, faces intensifying global scrutiny over the creation of sexualised and non-consensual images of women and children.

The Series E funding round, announced on Tuesday, exceeded xAI’s initial $15bn target and attracted heavyweight backers including Nvidia, Fidelity, Qatar’s sovereign wealth fund and Valor Equity Partners, the private investment firm run by Antonio Gracias, a long-time Musk ally.

In its announcement, xAI highlighted Grok’s image-generation capabilities as a core part of its technological proposition — a move that has raised eyebrows given the controversy now engulfing the platform.

While xAI lacks the brand recognition of rivals such as OpenAI, the maker of ChatGPT, it has nonetheless continued to attract significant capital and government contracts amid the global AI investment boom. That momentum has persisted despite repeated criticism over Grok’s output, including allegations of misinformation, antisemitic content and now potentially illegal sexual imagery.

Over recent days, Grok has responded to tens of thousands of prompts on Musk-owned platform X requesting the digital removal of women’s clothing or the creation of sexualised images without consent. Among those targeted was Ashley St Clair, the estranged mother of one of Musk’s children, who said complaints made to the platform went unanswered.

“I felt horrified and violated,” she said, adding that images included personal details visible in the background. Requests for comment sent to xAI reportedly triggered an automated response reading: “Legacy Media Lies.”

More seriously, some images generated by Grok reportedly involved minors. In one case, a photo of a 12-year-old girl was manipulated to depict her in swimwear, while other prompts allegedly produced sexualised images involving children as young as ten. Although Grok issued a public apology last week citing failures in its safeguards, further examples continued to surface afterwards.

The controversy has prompted swift international reaction. French ministers have referred Grok’s output to prosecutors and EU media regulators to assess whether it breaches the bloc’s Digital Services Act. In the UK, Technology Secretary Liz Kendall described the images as “appalling and unacceptable” and called on Ofcom to investigate. Ofcom confirmed it has contacted xAI to determine whether formal action is required.

By contrast, US lawmakers — where xAI is headquartered — have so far been relatively quiet, despite mounting calls for tighter oversight of generative AI tools.

The funding round will support xAI’s aggressive expansion, including the build-out of large-scale data centres in Memphis, Tennessee, and further development of its AI models. The company says the capital will help advance its stated mission of “understanding the universe”.

This is not the first time xAI has announced major funding during controversy. Last summer, shortly after Grok posted antisemitic and pro-Nazi content — including referring to itself as “MechaHitler” — the company revealed it had secured a near-$200m contract with the US Department of Defense.

For investors, the episode underlines a growing tension in the AI sector: vast sums of capital continue to flow into frontier technologies, even as regulators, governments and the public struggle to keep pace with their societal and ethical consequences.

Read more:
Elon Musk’s xAI raises $20bn despite mounting backlash over Grok deepfakes

Donald Trump has claimed that Venezuela will “turn over” between 30 and 50 million barrels of oil to the United States following a US-backed operation that removed President Nicolás Maduro from power.

Posting on social media, the US president said the oil — worth an estimated $2.8bn (£2.1bn) at current market prices, would be sold by the US, with proceeds controlled by him and used “to benefit the people of Venezuela and the United States”.

The remarks came days after Maduro was flown to the US to face long-standing charges related to drug trafficking and weapons offences, and after Delcy Rodríguez was sworn in as Venezuela’s interim president.

Trump also said he expected US oil companies to be “up and running” in Venezuela within 18 months, adding that large-scale American investment would soon flow into the country.

However, energy analysts have poured cold water on the timetable, warning that restoring Venezuela’s oil industry would require tens of billions of dollars and could take a decade or more.

Venezuela holds the world’s largest proven oil reserves, estimated at more than 300 billion barrels, but output has been in long-term decline since the early 2000s due to underinvestment, mismanagement and international sanctions. Its heavy crude is also costly and complex to refine, limiting the number of facilities able to process it.

China, currently the largest buyer of Venezuelan oil, condemned Trump’s comments, describing them as a violation of international law and an infringement of Venezuelan sovereignty. Beijing also criticised reports that Washington is pressing Caracas to sever economic ties with China, Russia, Iran and Cuba in exchange for US investment.

A spokesperson for China’s foreign ministry said cooperation between China and Venezuela was “between two sovereign states” and must be protected under international law.

According to reports by US media, Trump has pushed for an exclusive oil partnership between Washington and Caracas. On Truth Social, he said the oil would be sold at market prices but that the revenue would be overseen directly by the US administration.

Trump argued that increased Venezuelan oil production would help keep global prices down, saying it was “good for the United States” to bring the country back as a major supplier.

Yet US oil majors have been cautious. Chevron, currently the only American oil company operating in Venezuela under a limited licence, said it remained focused on employee safety and regulatory compliance. ConocoPhillips, which exited Venezuela years ago following nationalisation, said it was monitoring developments but that it would be “premature to speculate” on future investments.

Exxon declined to comment.

Venezuela nationalised its oil industry in 1976 and increased state control over foreign-owned assets in 2007 under Hugo Chávez. In 2019, a World Bank tribunal ordered Venezuela to pay ConocoPhillips $8.7bn in compensation for expropriated assets — a sum that remains unpaid.

While Trump and US officials have claimed that Venezuela “stole” American oil, legal experts note that natural resources are owned by sovereign states under international law. US companies historically operated under licence agreements rather than owning the oil itself.

With Venezuela’s infrastructure degraded, sanctions still in flux and political uncertainty high, analysts warn that any meaningful increase in production — and any impact on global oil prices — is unlikely in the near term.

Read more:
Trump claims Venezuela will hand over up to 50m barrels of oil to US after regime change