Good morning. Andrew here. As we head to Davos, we’re taking a look at one of the conversations that is likely to be top of mind there: an intricate game of chicken taking place between the White House and major oil companies over investing in Venezuela. DealBook contributor Peter Coy gets at the central question: Who will blink first? Also, Marc Benioff, the Salesforce founder, talks with us about Davos and A.I. And make sure to take today’s quiz. It’s a doozy. (Was this newsletter forwarded to you? Sign up here.)
What comes next?
“I’ll probably be inclined to keep Exxon out,” President Trump told reporters on Sunday. “I didn’t like their response. They’re playing too cute.” Trump, who has promised that U.S. oil companies would spend $100 billion in Venezuela after the ouster of President Nicolás Maduro, was referring to comments made by Darren Woods, the Exxon Mobil chief executive, at a White House event this month in which he called Venezuela “uninvestable.” The exchange reflects a fundamental disagreement between the U.S. oil industry and the president, one that won’t be easily resolved. Trump wants low oil prices. The leaders of the oil majors want higher oil prices. He wants them to invest heavily. They’re all about economizing on investment and cutting risk while rewarding shareholders with dividends and share repurchases. Now the two sides are at an impasse. Trump will either create incentives for oil companies to invest in Venezuela or punish them for holding out. And the conflicting priorities will inform what happens next. “We’re not going to aggressively put lots of extra barrels into an oversupplied market,” Vicki Hollub, the chief executive of Occidental Petroleum, told securities analysts on an earnings call in November, well before the White House meeting with oil executives on Jan. 9. Mike Wirth, the chief executive of Chevron, bragged on a November earnings call that the company had gotten good at eliminating marginal investment projects. “We’re killing things earlier,” he said. Oil executives seem to not only be balking at the risk of having assets nationalized but also expressing a view that has become standard across the sector: Big new projects have to survive intense scrutiny. Venezuela’s tar-like oil has to be diluted to flow through a pipeline. It has to be upgraded locally before it even gets to a refinery. That’s a multi-billion-dollar expense. For most of the past 15 years, Big Oil was focused on projects — such as drilling for North American shale oil — that have a quick and predictable payback, even though their production drops off steeply after the first year. To some extent, the companies deprioritized projects such as those in offshore oil, or heavy crude deposits like Venezuela’s, that keep producing at low cost for 10 to 20 years but require more upfront investment to bring online. So a lot of oil came from fields that were low in risk but relatively high in cost. According to Rystad Energy, a research company, in 2024 North American shale had a break-even cost of $45 a barrel. That was expensive compared with offshore deepwater ($43), offshore shelf ($37) and onshore Middle East ($27).
From 2014 to 2024, daily crude production in the United States increased 71 percent, while production in the rest of the world actually decreased a couple of tenths of a percent, according to data in the Statistical Review of World Energy 2025. That’s changing a bit. North American shale is beginning to be tapped out, although the oil majors are using advanced technology to get more oil out at lower costs. Since around 2022, when Russia invaded Ukraine and oil prices spiked, the oil majors have shifted some of their interest back toward higher-risk, longer-payout projects in parts of the world where the oil is cheapest — not North America. Exxon and Chevron have explored bidding on exploration opportunities in Libya. Last year, Chevron signed an agreement in principle to develop Iraq’s vast Nasiriyah oil field and other assets. Exxon is also in discussions with Iraq. Even Iran looks interesting to Big Oil for the first time since the overthrow of the shah in 1979. “If we could go in there and really be able to produce in Iran again, the sky is the limit for that country,” Mike Sommers, the chief executive of the American Petroleum Institute, said Tuesday on CNBC. But that doesn’t mean the oil majors are throwing caution to the winds. Devin McDermott, an oil analyst at Morgan Stanley, said that even if sanctions were removed and the oil majors were to do business with Iran, “They would need confidence in the stability of the regime, fiscal terms that are attractive and competitive, all of those things would need to fall into place first.” Further complicating their calculations, projections of future oil demand have become more uncertain with the rise of renewables. “For the first 150 years, oil has been a growth business. What’s become a real question is, ‘Well, are we going to see oil demand plateau or even decline?’” said Jim Burkhard, the global head of crude oil research for S&P Global Energy. As for Venezuela, there actually is a case for the Western majors to invest. Although its oil is heavy and sulfurous, it is abundant, well mapped and partly developed. Investing in Venezuela would be a way for an oil company to assure itself of a plentiful supply of crude for decades to come. But it would still be a big lift. Venezuela’s production fell 64 percent from 2014 to 2024, indicating that bringing it up to world standards would be a long, slow process. Oil companies don’t want to “get out too far on the risk curve on projects,” McDermott said. Trump would like oil companies to invest more to bring down the price of crude, which would in turn lower prices at the pump and possibly boost his approval ratings. Setting aside the fact that the timing is way off — projects negotiated now won’t bear fruit for years — the president’s preferences bump up against what oil executives perceive as their duty to shareholders. Eimear P. Bonner, Chevron’s chief financial officer, said to Wall Street analysts last year: “Not everything gets funded. Period.”
Jay Powell tapped into a groundswell of support. Several Republican lawmakers, former central bank chiefs and former Treasury secretaries criticized the criminal investigation into Powell by the Justice Department. The blowback may have changed the calculus on Trump’s plans for replacing Powell as Fed chairman after his term ends in May. The president on Friday expressed hesitation in appointing Kevin A. Hassett, his top economic adviser who is considered the front-runner for the job. Banks balked at Trump’s proposed 10 percent cap on credit card interest rates. Despite having no obvious path to impose the cap, the president said on Truth Social that it would go into effect in late January. Bank stocks tanked, and executives warned that they would have to cut down on the amount of credit they offered if such a cap existed. A key crypto bill stalled. Senator Tim Scott, Republican of South Carolina and chair of the Senate Banking Committee, postponed a vote on a draft of the legislation known as the Clarity Act shortly after Brian Armstrong, the chief executive of Coinbase, criticized the current version of the bill on social media. The scuffle reflects a lobbying showdown between banks and crypto companies as they seek to shape new rules around crypto. Trump threatened new tariffs. The president said he would impose tariffs on countries that opposed his efforts to take over Greenland. He also said he would deploy a 25 percent tax on goods from countries “doing business” with Iran amid a violent crackdown on protests in the country. If he follows through, China and India, some of Iran’s biggest trading partners, could be hit hard. Other big deals: Google will power Apple’s A.I. tools. Inflation ended the year on a subdued note. Goldman Sachs and Morgan Stanley reported bumper results. And ads may soon be coming to ChatGPT.
Davos gets an A.I. agentMarc Benioff, the chief executive of Salesforce, has been called an archetypal Davos Man for his wealth and influence outside of business. But he is also, more literally, a man who is very involved in Davos, the World Economic Forum’s annual meeting in Switzerland. Benioff is a member of the W.E.F.’s board of trustees, and the Davos app uses Salesforce technology. Starting Monday, about 850 chief executives are expected at the largest Davos gathering ever, with highly anticipated speakers including Trump and the Nvidia chief executive, Jensen Huang. And like seemingly every global business, the Davos app has some new A.I. features this year. In addition to a map and calendar, it will include an A.I. agent that can recommend sessions, help schedule meetings and even book a conference room on an attendee’s behalf. DealBook spoke with Benioff about Davos and A.I. The responses have been condensed and edited. What is your personal Davos strategy? I’m on some plenaries. I’ll moderate a panel. I’ll do seven, eight, 10 interviews. So I have to have my narrative in my pocket, that’s number one. Number two is, and this is where the A.I. agent comes in, I need to have an understanding of what part of the conference do I actually want to get to. Its always been a paper process for me. I’ve just printed out the agenda and then gone through it myself. It’s not something I can really delegate even to my team, because they don’t realize some of the things that I’m interested in. Outside of Davos, what do you think will change this year about how companies use A.I.? The consumer A.I. experience runs well now because it works off of an aggregated data set that basically came out of the internet. That’s not how the enterprise works. The enterprise needs that same kind of data layer, but it needs to harmonize and integrate the data. Then there’s the app layer that sits on top, and finally there’s an agentic platform that sits on top of that. The idea that we’re going to have customer agents and employee agents is extremely exciting. Customer agents, employee agents — do you think there will also be C.E.O. agents? I hope so. You’ve said 30 to 50 percent of Salesforce’s work is done by A.I. How do you measure that? We’ve had a huge growth in our revenues and our profits and our cash flow in the last three years. But the number of employees has not grown at the same rate. But how do you know that, say, your products haven’t just gotten that much better? I’ll give you another example. I didn’t really hire any software engineers this year. When I told my team I was talking to you ahead of Davos, one question they had was, ‘Who is playing at the Salesforce party?’ Last year I heard it was Sting. They’re gonna have to find out when they get there. Quiz: C.E.O. focusArtificial intelligence unsurprisingly featured prominently in the Conference Board’s annual survey about C-suite priorities released this week. The survey polled 1,700 executives, including more than 700 chief executives. About 42 percent of global executives who participated in the survey said A.I. would be one of their top two investment priorities in 2026, which was the most popular response. When it comes to investing in A.I., what did C.E.O.s say their top focus would be this year? A. Improving the data required to measure return on A.I. investment B. Enhancing A.I. expertise C. Improving the culture of the work force to adopt A.I. D. Integrating data across existing systems Scroll down to find the answer at the bottom of the newsletter. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times. Quiz answer: A. Thanks for reading! We’ll see you tomorrow. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.
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