JP: Affect of U.S. strike on Venezuela: The World’s Largest Oil Reserves Simply Opened Up – ‘Everything we thought we knew about world oil markets changed’
https://www.bloomberg.com/news/newsletters/2026-01-05/venezuela-s-oil-reserves-open-up-after-maduro-arrest-but-will-need-investment
Bloomberg Excerpt:
Everything we thought we knew about world oil markets changed with the capture of Venezuelan President Nicolás Maduro this weekend. The sight of the former strongman blindfolded and handcuffed on a US warship headed to New York to face drug trafficking charges sent shock waves around the globe—but nowhere more so than the boardrooms of world’s biggest oil companies.
The U.S. strike on Venezuela has renewed focus on the country’s oil sector, which includes some of the richest crude reserves in the world.
“We’re going to rebuild the oil infrastructure, which will cost billions of dollars, it will be paid for by the oil companies directly. And we’re going to get the oil flowing the way it should be,” President Trump said in a public address on Saturday following the attack, in which the U.S. captured Venezuelan President Nicolás Maduro and his wife.
Here’s what to know about Venezuela’s oil industry.
How much oil does Venezuela produce?
Venezuela, a member of the Organization of the Petroleum Exporting Countries, produces relatively little crude compared with other leading oil-producing nations. The country produces roughly 1 million barrels of crude oil per day, less than 1% of global output, according to OPEC data.
Venezuela’s oil production topped 3 million barrels per day in the early 2000s, but it has fallen sharply in recent decades due to declining investment and the impact of U.S. sanctions. Because of U.S. political pressure, Venezuela today exports most of its oil to China, according to JP.
The prospect of pumping oil from Venezuela, home to the largest reserves on Earth and just a short ship voyage away from the refineries of the US Gulf Coast, has long tantalized the likes of Exxon Mobil, Chevron and ConocoPhillips. But the country has been a graveyard for foreign investment for decades because of corruption, theft and repeated nationalization of oil assets. More recently, US sanctions have curtailed the industry, with production now only about 1 million barrels a day, less than a third of its peak in the 1970s.
That’s all about to change—at least if you believe President Donald Trump.
“We’re going to have our very large United States oil companies—the biggest anywhere in the world—go in, spend billions of dollars, fix the badly broken infrastructure—the oil infrastructure—and start making money for the country,” he said during a news conference on Saturday at his Mar-a-Lago club in Florida.
Wall Street was salivating at the prospect on Monday morning. Chevron, the only US oil major to operate in Venezuela due to a US sanctions waiver, saw its stock surge as much as 6% while Exxon and ConocoPhillips also climbed. SLB Ltd., a Houston-based oil field servicer, was up 12%. But it may not be so straightforward.