Venezuela's Political Transition Can Keep Global Oil Prices Lower
Recap Into What’s Been Happening in Venezuela:
-
Right from US President Trump's first presidential term, he has been constantly sanctioning Venezuela and additionally elevating the sanctions which has drastically impacted the country’s output capacity.
-
Since December 2025, Venezuela related oil tankers in nearby waters have been intercepted and confiscated over three separate instances.
-
Additionally on 31st December 2025, US Department of the Treasury’s Office of Foreign Assets Control (OFAC) further announced sanctions against four companies operating in Venezuela’s oil sector and designated four related oil tankers as blocked property.
-
On January 3, 2026, United States successfully carried out a strike against Venezuela capturing the Venezuelan President Maduro and his wife and removing them from the country causing a political regime upheavel.
-
US President Trump also announced that major US Oil Companies would invest tens of billions of dollars to rejuvenate Venezuela’s damaged oil infrastructure and help the country retain profitability while also catalysing a regime change.
-
While many countries like China debated the move, global markets reacted to the news by elevated prices for the short-term but are predicted to stabilize as the US enhances its oil production and begins contributing to global crude oil trade markets maintaining prices as well.
A Dive Into Venezuela’s Crude Capacities
While today Venezuela’s oil industry appears to have collapsed, back in the late 1990s it was the premier supplier with over 3 million barrels of oil being produced everyday which has now reduced to a substantially lesser figure. This collapse has become a result of the chronic mismanagement, politicization and lack of investment in the sector with the additional sanctions having resulted in a serious decline in the country’s overall capacity.
While currently the country only produces 750,000-800,000 barrels per day everyday, it presents potential to attain 1.3-1.4 million barrels as soon as within two years aligning with the political regime change as suggested by the US President while even reaching over 2.5 million barrels with heavier investments in the same time!
As estimated by the U.S Energy Information Administration, Venezuela holds the gateway to over 303 billion barrels of crude oil reserves and if the country were to experience newer shifts and investments, it is sure to attract international oil companies from all around the globe! With US Giants like Chevron, Exxonmobil and Spain's Repsol and Italy's Eni monitoring the situation, it is simply a spectacle of time on how it all plays out!
The Pathway To Recovery
Considering the years of disruption and damage to the oil sector, boosting production and enhancing output to pre-sanction or historically high levels would not be a simple process. While companies like Chevron are already invested in the country with support for over 23% output, even scaling would require the right time and opportunity!
Based on an estimate by Venezuela’s state oil company PDVSA, the country requires investments in the range of $58 billion and nearly three years to totally modernize and improve their pipelines while achieving highs of over 3.5 million barrels being produced per day.
Currently the Global Oil Markets are in excess supply of Oil but Venezuela’s supply could alter and drive down the prices by
-
The Global Oil Markets are in favourable condition as while the United States, Brazil, Guyana, and Canada continue to pump oil into an excessively supplied market, Venezuela would also join the similar pool of supply competing with them.
-
Venezuela’s heavy, sour crude is the most suited for the United States refineries and would be more useful than the existing American crude while opening newer avenues for diesel and other industrial products.
-
A stable and continued supply from the West could also decrease dependence on Iran and Russia, redefining geopolitical relationships as well as reducing possibilities for global price spikes
What Venezuelan Recovery Could Mean For Global Markets
With the assistance and shared control over the Venezuelan Oil Reserves and the pre-controlled Guyana and Existing US Reserves, the US could gain influential control over roughly 30% of global supplies which would significantly alter the power dynamics in the International Energy Markets!
Through this control, the United States could benefit through leverage and financial security through energy resources which could not only help limit global prices to medium or historically low ranges but also promote investment opportunities considering the humongous scale and potential for growth in the Venezuelan supplies.
For consumers worldwide, Venezuelan Oil could also provide reliefs from inflation ensuring the fuel and energy costs are manageable for individual households and businesses.
While many argue that it would be difficult to notice short-term changes, the gradual and steady rise of the Venezuelan and US Supply will influence global markets for 2026 and beyond!
Forecast Of The Future
In a time when the global oil markets are already dabbling in substantial oversupply, the addition of Venezuelan oil reserves in the recent future could help ensure that the market remains in excessive supply, in turn ensuring that global oil prices continue to dip lower.
And while experts may argue that the oil market continues to remain unpredictable and volatile in the short term, the question in focus would rather emphasize on the political, economic and atmospheric conditions of Venezuela. While the country holds the machinery and capacity to reach massive production levels, it requires stability, investment and emphasis on its oil production for attaining certainty amidst their bouts of tension and distress across the country.
Latest Posts
