He oil has grabbed all the headlines after the United States attack on Venezuela. And it is no wonder: Venezuela concentrates more than 300,000 million barrels of crude oil, 17% of the world’s oil reserveseven more than Saudi Arabia, the largest producer on the planet, according to data from the United States Energy Information Administration. Even with these enormous reserves, Venezuela has been producing less than 1% of the world’s crude oil supply. The corruption and mismanagement of the regime, as well as US economic sanctions, have caused production to decrease from the 3.5 million barrels per day pumped in 1999 to current levels, which do not reach one million barrels.
But Donald Trump has promised to change that. «We are going to make our big American oil companies, the biggest in the world, intervene, invest billions of dollars, repair the oil infrastructurewhich is seriously damaged, and begin to generate profits for the country,» said the US president from his mansion in Mar-a-Lago (Florida). During the week of December 26, the US produced around 13.8 million barrels of crude oil per day.
Chevron is the only major US oil company operating in Venezuela. The company exported about 140,000 barrels per day in the fourth quarter of 2025, according to data from the energy consulting firm Kpler. «We are going to make the oil flow as it should. We will sell large amounts of oil to other countries; many are using it now, but I would say many more will come,» Trump stressed. Although a large number of analysts believe that US intervention will be positive for oil companies – especially, of course, for American companies – and for crude oil, RBC Capital Markets and other experts show more reservations in this regard, with the Canadian firm speaking of a «long-term structural risk» for oil markets.
THE PROBLEMS YOU SEE
Most of the crude oil that lies in the country is heavy —very dense and with a high sulfur content—, ideal for converting into asphalt or diesel, but very complicated to transport and requires specialized machinery for refining. This is of interest to the United States, since its light oil cannot easily replace heavy oil, which is very limited in international markets due to sanctions on Venezuelan and Russian crude oil. Years ago, U.S. refineries on the Gulf Coast were optimized to process this type of heavy crude when U.S. production was falling and Venezuelan and Mexican crude was plentiful. Therefore, refiners would like to have more access to Venezuelan crude, as it would allow them to operate more efficiently and is usually a little cheaper. However, the Canadian firm believes that It is one thing to say that oil will «flow again» and another that oil will «flow». And in order for the Venezuelan oil industry to pump crude oil again at the levels of the end of the last century, it is required «hundreds of billions of dollars of investment». This is indicated by Kathleen Brooks, director of research at XTB, who highlights that the necessary investments include «modernizing old and deteriorated infrastructure, drilling new wells and building more refineries to process Venezuelan heavy crude oil.» «Optimize a country so rich in resources to generate the income necessary for its recovery could take until 2030 or longer«, according to some analysts,» he adds. Javier Rivas, professor at EAE Business School, tells the ‘EFE’ agency that in 2023 the cost of bringing the industry up to date could require an investment of 250 billion dollars. Thus, two scenarios open up: either the structure of the country is repaired, or it is taken on specialized ships to Florida (USA), an option that would not be positive for the Venezuelan economy. Likewise, companies could have doubts about whether the Venezuelan Government – perhaps a supervised or docile Chavismo – can be of trust. In 2007, then-President Hugo Chávez nationalized much of oil production and forced large companies such as ExxonMobil and ConocoPhillips to leave the country. «The problem is not only that the infrastructure is in poor condition, but mainly how to get foreign companies to start investing before having a clear perspective on political stability, the contract situation and so on,» Francisco Monaldi, director of the Latin American energy program at Rice University, tells ‘Fortune’. Lastly, there is a no less important issue that also appears on the horizon: the legal complexities to take control over Venezuela’s resources. According to Andy Lipow, president of Lipow Oil Associates, the answer may seem simple: the state oil company PDVSA, since it majority controls production and reserves. But it is not. «Since it is not clear at this time who is in charge in Venezuela, we could see exports stop completely, as buyers do not know who to send the money to,» Lipow acknowledges to ‘CNBC’. But that’s not all. Helima Croft, head of global commodity strategy at RBC Capital Markets, believes that all these calculations are useless if one thing is not guaranteed: a «stable security environment». «All bets are off in a scenario of chaotic change of power like the one that occurred in Libya or Iraq,» he emphasizes.
OPEC AND PRICES
On the other hand, there is the factor OPEC. And, as a member and founder of the oil cartel, Venezuela will have to coordinate any increase in production with the group’s policy at an already complicated time for crude oil, whose prices are not rising despite continuous production cuts. «The oil market is currently trending toward oversupply,» says Bob McNally of Rapidan Energy Group. For its part, RBC acknowledges that, while more Venezuelan crude is likely to flow in the short term, the possible duration of the increase in oil production and the final ratio between upgraded and non-upgraded barrels are «open questions.» These dynamics, indicates the Canadian firm, «matter», since approximately 45% (2.2 million barrels per day, or bbl/d) of Western Canada’s production in 2024 – of 4.9 million bbl/d – consisted of bitumen, while 25% (1.2 million bbl/d) was upgraded synthetic crude. «The possible increase in heavy crude congestion on the US Gulf Coast (PADD 3) will benefit refiners, but we understand from our conversations that this market is already partially balanced by re-exports of diluted bitumen. In our view, Canadian exports will continue to dominate the US Mid-Continent (PADD 2) and the Rockies (PADD IV), and will likely have a stronger than expected presence on the West Coast (PADD 5), with Asia (China) as an absorption market,» these analysts detail. That, they explain, will have consequences on prices. To do this, we will have to look at the spread between the Canadian barrel WCSheavy and sour, and the US barrel WTIlight and sweet. This differential, notes the Canadian firm, reflects «both the geographic component (output capacity through export pipelines) and the differential between light and heavy crude oil (influenced by OPEC+ policy)» and is key because it determines how much Canadian heavy crude oil producers earn, influences the competitiveness of crude oil in the global market, and can affect investment and logistics decisions. According to RBC, the expansion of the Trans Mountain Pipeline (590,000 bbl/d) has reduced average WCS-WTI spreads by 27%, with less volatility compared to the previous 16 months, since its commissioning in May 2024. This, RBC adds, «has compressed the geographical spreads» of the WCS «from double digits to the mid-high single digit range.» «The Brent–Maya (Venezuelan) ‘proxy’ that we use to measure the spreads between light and heavy could widen beyond its five-year average ($10.25) if Venezuelan production increases substantially, and this component is less controllable. As a sensitivity, a widening of one dollar in the light-heavy spread in our WCS-WTI projection for 2026 of $12.49, widening it by 8%,» they say these experts.
