Analysis of the Impact of Changes in U.S. Sanctions Policy on Venezuela

Based on the latest data and market information I have collected, I will provide you with an in-depth analysis report on the impact of changes in U.S. sanctions policy on Venezuela on the global oil supply landscape and investment opportunities in energy stocks.

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

, accounting for about of global total reserves[1][2]. This reserve scale far exceeds that of other major oil-producing countries such as Saudi Arabia, Canada, and Russia. However, the country’s actual production capacity is far from reaching its potential.

According to the latest statistics from Longzhong Information, Venezuela’s crude oil daily production in November 2025 was only

, a month-on-month decrease of 2.30%, and the average daily production for the full year 2025 was 916,000 barrels, a year-on-year increase of 8.57%[1]. In terms of exports, the average daily export volume in November 2025 was 653,000 barrels, a month-on-month decrease of 16.71%, and the annual average export volume was 728,000 barrels per day[1]. This means that Venezuela’s current production accounts for less than of global supply, in sharp contrast to its huge reserves.

The sharp decline in Venezuela’s crude oil production began in 2017. Affected by U.S. sanctions at that time, production continued to slide from the previous level of over 2 million barrels per day, and even fell to a low of around 300,000 barrels per day in 2020[1]. Chevron is the only major U.S. oil company that has never fully withdrawn from Venezuela. Through obtaining exemptions, the company maintained its joint venture with Petróleos de Venezuela, S.A. (PDVSA) and retained on-site personnel, thus ensuring operational continuity[3]. Currently, Chevron’s production accounts for approximately one-quarter of Venezuela’s total production.

Venezuelan crude oil has unique characteristics: it is dominated by high-sulfur heavy and extra-heavy crude oil (API gravity of approximately 16°), which requires special processing and blending with diluents for pipeline transportation and refining. Its extraction and operation costs are significantly higher than those of conventional light crude oil[1]. Merey crude oil is the country’s core export crude variety, a typical high-sulfur extra-heavy crude oil, and also an important raw material for asphalt refineries.

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Since March 2025, the U.S. has imposed continuous energy and economic sanctions on Venezuela, adopting measures such as oil industry blockades and tariff hikes[1]. In December 2025, the U.S. intercepted and seized Venezuelan oil tankers, severely impacting the country’s exports. On January 3, 2026, the U.S. took tougher actions, leading to a sharp rise in geopolitical risks.

Looking at the market reaction, although events involving the world’s largest oil reserves usually trigger sharp fluctuations in oil prices, the market reaction this time was relatively calm. The price of Brent crude oil only rose slightly from $60.75 per barrel to $62.1 per barrel, an increase of less than 2.2%[2]. This phenomenon reflects profound changes in the supply and demand structure of the international oil market.

• Rapid Production Recovery: If sanctions are lifted, Venezuela can quickly restore production to above 800,000 barrels per day, and the clearance of onshore inventories will immediately boost export volumes[2]
• Infrastructure Investment: Major U.S. oil companies (such as Chevron and ExxonMobil) may invest tens of billions of dollars to rebuild Venezuela’s energy infrastructure, with the goal of increasing daily production to 2 million barrels[2]
• Short-Term Price Pressure: Incremental supply will exacerbate the global supply glut, potentially pushing Brent crude oil prices down to the $50 per barrel range

• Further Production Decline: Due to the withdrawal of market participants and high inventory pressure, Venezuela’s crude oil production may drop by 200,000 to 300,000 barrels per day from the November 2025 level of 820,000 barrels per day[2]
• Rising Risk Premium: Geopolitical uncertainty will provide short-term support for oil prices
• Replacement Supply to Fill the Gap: Russia’s Urals crude oil, Canadian oil sands, etc., can quickly fill the supply gap

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The International Energy Agency (IEA) predicts that the global crude oil market will see a supply glut of approximately

in 2026[5]. This glut mainly stems from the following factors:

1. OPEC+ Production Growth
   : Starting from April 2025, OPEC+ gradually lifted production cut measures, leading to continuous production growth. Although production increases are suspended in the first quarter of 2026, there is ample spare capacity that can quickly make up for unexpected supply disruptions[5]

2. Non-OPEC+ Supply Increment
   : Brazil and Guyana are the main sources of incremental supply. The IEA expects Brazil’s average daily crude oil production to grow moderately by 260,000 barrels to 4.1 million barrels in 2026, and Guyana’s average daily production to increase by 180,000 barrels to 890,000 barrels[5]

3. Slowing Demand Growth
   : Affected by the substitution effect of new energy vehicles, the IEA, OPEC, and EIA predict that China’s average daily crude oil demand will only increase by 200,000 to 290,000 barrels year-on-year in 2026[5]

In terms of absolute volume, Venezuela’s production of 900,000 barrels per day and exports of 600,000 barrels per day account for less than 1% of the global daily supply of over 100 million barrels[1][2]. Even if exports decrease by another 200,000 barrels per day, the substantive impact on global supply will still be limited, as substitutes such as Russia’s Urals crude oil and Canadian oil sands can quickly fill the gap[2].

However, from a structural impact perspective:

• Impact on Oil Product Structure
  : Venezuela’s heavy high-sulfur crude oil requires specific refineries for processing. U.S. refiners have shifted to light crude oil after the shale oil revolution, and the proportion of Venezuelan crude oil processed has dropped from 15% in 2010 to less than 5%[2]
• Regional Impact
  : China is the largest buyer of Venezuelan crude oil, with approximately two-thirds of exports going to China and 23% to the U.S.[3]
• Logistics Impact
  : Logistics disruption risks such as tanker seizures and surging insurance rates may further compress exports

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According to the latest market data, the energy sector performed weakly today, falling by

, making it the worst-performing sector among all industries[4]. In contrast, the real estate sector rose by 1.36% and the industrial sector rose by 1.32%, ranking as the top performers.

• Period Close: $162.11 (January 9, 2026)
• Period Change: +$15.65 (+10.69%)
• 20-day Moving Average: $152.58
• 50-day Moving Average: $152.58
• Average Daily Trading Volume: 86.9 million shares

Chevron has unique structural advantages in Venezuela. As the only major U.S. oil company that has never fully withdrawn from Venezuela, Chevron maintained its joint venture through exemptions and has operated in the country for over 100 years[3]. If sanctions policy shifts in a favorable direction, Chevron can benefit immediately[3].

• Period Close: $124.61 (January 9, 2026)
• Period Change: +$7.41 (+6.32%)
• 20-day Moving Average: $119.71
• 50-day Moving Average: $117.88
• Average Daily Trading Volume: 158.8 million shares

ExxonMobil may also benefit from changes in Venezuela’s policy. The Trump administration has authorized major oil companies such as ExxonMobil to enter the country to repair energy facilities[2].

Affected by changes in U.S. policy on Venezuela, oil and gas stocks opened strongly higher today:

• Zhunyou Co., Ltd. (002207.SZ): Limit-up at opening
• Tongyuan Petroleum (300164.SZ): Higher opening
• Keli Co., Ltd. (920088): Higher opening
• Qianneng Hengxin (300191.SZ): Higher opening
• Hibop (002554.SZ): Higher opening
• Sinopec Oilfield Service (600871.SH): Higher opening

The rise of these companies reflects the market’s expectation of business opportunities brought about by changes in the situation in Venezuela, especially for enterprises related to oilfield services and equipment supply.

Although sanctions relaxation may bring investment opportunities, the following risk factors need to be noted:

1. Political Stability Risk
   : Venezuela’s political situation may be unstable, and anti-U.S. armed resistance may persist for a long time[2]
2. Investment Payback Period
   : The development cost of heavy crude oil is as high as $40 to $60 per barrel, and current oil price levels are difficult to support profitability[2]
3. Weak Infrastructure
   : Venezuela’s oil infrastructure is dilapidated due to long-term neglect, and repairs will take a long time[5]
4. International Public Opinion Pressure
   : “Post-war chaos” similar to that in Iraq and Libya may lead to project delays[2]

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• Geopolitical Risk Premium
  : Geopolitical uncertainties between the U.S. and Venezuela will support oil prices in the short term[1]
• OPEC+ Policy Trends
  : Discussions among the oil-producing country alliance about gradually restoring production have never ceased, which may further exacerbate the supply glut[1]
• Logistics Disruption Risk
  : Factors such as tanker seizures and surging insurance rates may affect actual export volumes

In the long term, U.S. policy on Venezuela may reshape the global energy order:

1. Awakening of Energy Independence Awareness in the Americas
   : The accelerated development of Brazil’s deep-sea oil fields and Argentina’s shale gas projects will weaken U.S. control over the global oil market[2]
2. OPEC+ Alliance Faces Tests
   : Increased supply from Venezuela may affect the alliance relationship between Russia and Saudi Arabia[2]
3. Accelerated Energy Transition
   : The International Energy Agency warns that the penetration rate of electric vehicles will reach 45% in 2026, and oil demand growth will almost entirely depend on non-OECD countries[2]

1. Major U.S. Integrated Oil and Gas Companies
   : Chevron (CVX) and ExxonMobil (XOM) have first-mover advantages and operational experience, and will directly benefit from favorable policy changes
2. Oilfield Service Companies
   : A-share companies such as Tongyuan Petroleum and Jereh Co., Ltd. may see order growth amid the recovery of Venezuela’s business
3. Light Crude Oil Refiners
   : Refineries with the ability to process light crude oil may gain cost advantages when heavy crude oil supply increases
4. Risk Hedging
   : Given the fundamental backdrop of global supply glut, consider hedging against oil price downside risks through futures or options

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[1] Securities Times - “Oil and Gas Stocks Open Strongly Higher! Venezuela’s Crude Oil Production Accounts for Less Than 1%” (https://www.stcn.com/article/detail/3570343.html)

[2] South American Chinese Daily - “Trump Says Venezuela Will Transfer 30 to 50 Million Barrels of Oil to the U.S.” (https://www.br-cn.com/static/content/news/xwjj/2026-01-07/1458476906454221265.html)

[3] Deutsche Welle - “Venezuela’s Oil Industry Can’t Do Without the U.S.” (https://www.dw.com/zh/离不开美国的委内瑞拉石油工业/a-75398701)

[4] Jinling API - Industry Sector Performance Data (2026-01-11)

[5] Futures Daily - “Crude Oil Supply Glut, Price Center of Gravity May Decline” (https://finance.eastmoney.com/a/202601073610810126.html)

[6] Wood Mackenzie - “Venezuela Regime Change: Impact on Oil & Crude Markets” (https://www.woodmac.com/news/opinion/venezuela-regime-change-what-it-means-for-oil-production-crude-and-product-markets/)

[7] Yahoo Finance - “Why Sanctions Relief Alone Won’t Fix Venezuela’s Oil Industry” (https://finance.yahoo.com/news/why-sanctions-relief-alone-wont-000000924.html)

[8] Eastmoney - “The First Geopolitical ‘Black Swan’ of 2026 Hits, Where Will International Oil Prices Go?” (https://finance.eastmoney.com/a/202601043608005193.html)