Analysis of the Impact of Relaxed Venezuelan Oil Sanctions on the U.S. Energy Market

According to the latest news, the Trump administration announced in early January 2026 that it had reached an agreement with Venezuela’s interim government, under which Venezuela will transfer 30 to 50 million barrels of sanctioned oil to the U.S. U.S. Secretary of Energy Chris Wright stated that the U.S. will ‘indefinitely control’ the sales of Venezuelan oil[1][2][3].

I. Overview of Venezuela’s Oil Resources

Venezuela holds the world’s largest oil reserves. According to data from the U.S. Energy Information Administration (EIA), its proven oil reserves are approximately

303 billion barrels

, accounting for

17%

of global total reserves, ranking first in the world[4]. However, due to long-term U.S. sanctions and insufficient investment, the country’s current daily oil production is only about 1 to 1.5 million barrels, far below its historical peak of 3.5 million barrels per day in the early 2000s[5].

II. Short-Term Impact on the Supply and Demand Pattern of the U.S. Energy Market

1. Impact on the Supply Side

According to research by market analysis firms Janus Henderson and Morgan Stanley,

the short-term impact on oil prices may be relatively limited

[6][7]. The main reasons include:

The global oil market is already in an oversupplied state
: Even if Venezuela supplies an additional 30 to 50 million barrels of oil to the market, it is still a drop in the bucket compared to the global daily consumption of over 100 million barrels
Release of sanctioned oil
: Venezuelan oil previously stranded at sea may gradually enter the market
Existing export pattern
: Currently, Chevron is the only U.S. oil giant that can export crude oil from Venezuela to the U.S. without hindrance, with a daily export volume of approximately 100,000 to 150,000 barrels[8]

2. Impact on the Price Side

The crude oil market reacted tepidly to this news. After the news was announced, oil prices rose briefly but then gave up their gains. Morgan Stanley expects Brent crude oil prices to fall to around

$55 per barrel

in the coming months, and the increase in Venezuelan supply will further reinforce this cautious outlook[7].

III. Potential Impact on the Performance of U.S. Oil and Gas Companies

1. Chevron — The Biggest Beneficiary

Chevron is currently the only U.S. oil giant still operating in Venezuela, with a significant

first-mover advantage

[8][9]. Under the agreement, the company is expected to:

Expand the scale of its existing operations in Venezuela
Gain more drilling rights and production sharing
Further consolidate its strategic layout in Latin America

2. ExxonMobil and ConocoPhillips

These two companies were once Venezuela’s largest foreign investors, but their assets were seized during the nationalization process by the Chávez government in 2007[10]. The shift in Venezuela’s political situation provides these two companies with the possibility of

recovering their nationalized assets

White House Spokesperson Tyler Rogers stated: ‘All of our oil companies are ready and willing to make large-scale investments in Venezuela to rebuild the oil infrastructure destroyed by the illegal Maduro regime.’[10]

3. Long-Term Performance Boost Potential

Company	Potential Benefits	Challenges
Chevron	Expand existing operations, first-mover advantage	Political stability, infrastructure
ExxonMobil	Recover nationalized assets, new contracts	Legal framework, long-term policies
ConocoPhillips	Recover nationalized assets, new investment opportunities	Investment payback period

IV. Long-Term Market Outlook and Key Challenges

1. Production Recovery Cycle

Analysts generally believe that it will take

5 to 10 years

and

tens of billions of dollars in infrastructure investment

for Venezuela’s oil production to return to historical levels[6][11]. Key bottlenecks include:

Aging infrastructure
: Years of sanctions have led to severe aging of refineries and oil pipelines
Brain drain of technical talent
: A large number of oil industry professionals have emigrated
Uncertain investment environment
: Political stability and legal framework remain major concerns

2. Geopolitical Impact

This agreement may have significant geopolitical implications[12]:

China
: May lose Venezuela as an important oil supply source and strategic ally
Russia
: Its geopolitical influence in Latin America is weakened
Iran
: Regional influence declines
Cuba
: Loses an important source of energy assistance

V. Investment Conclusions and Risk Warnings

Positive Factors:

U.S. oil and gas companies gain new growth markets and resource reserves
In the long run, increased Venezuelan oil supply may stabilize global energy prices
Chevron, as a first-mover, may earn excess returns

Risk Factors:

The political situation in Venezuela remains uncertain
Infrastructure reconstruction takes a long time and requires large amounts of capital
Global oil oversupply may lead to prolonged low oil prices
Legal and contractual risks may affect investment returns

References

[1] DW - Venezuela: Trump’s $3 billion oil windfall

[2] DOE - FACT SHEET: President Trump is Restoring Prosperity

[3] NYT - U.S. to Control Venezuela Oil Sales ‘Indefinitely’

[4] CNBC - Maduro overthrow could pave way for U.S. oil companies

[5] Janus Henderson - Venezuela: Implications for oil and the energy sector

[6] Morgan Stanley - Market Implications of U.S. Action in Venezuela

[7] Sprague Energy - The Oil Market Assessed the Impact on Venezuela’s Oil Flows

[8] Reuters - Venezuela to export $2 billion worth of oil to US

[9] Reuters - Trump administration sets meetings with oil companies

[10] CNBC - U.S. oil companies to recover Venezuela assets

[11] Offshore Energy - Guyana FPSO