Chevron shares Increase as Washington signals Venezuela oil revival
A New Dawn for Venezuelan Oil: Trump's Bold Move and the Path to Revival
January 7, 2026
The world woke up to extraordinary news on January 3, 2026: U.S. forces had conducted a daring military operation in Caracas, capturing Venezuelan President Nicolás Maduro and his wife, Cilia Flores. President Donald Trump announced the success of "Operation Absolute Resolve," describing it as a targeted law enforcement action to apprehend an indicted fugitive facing narco-terrorism and drug trafficking charges. By January 5, Maduro pleaded not guilty in a Manhattan federal court, marking the end of his 13-year rule and the beginning of a seismic shift in Venezuela's political and economic landscape.
This dramatic event has sent shockwaves through global markets, particularly the energy sector. Venezuela sits atop the world's largest proven oil reserves—estimated at over 300 billion barrels—yet years of mismanagement, corruption, underinvestment, and U.S. sanctions have reduced its production to a fraction of its potential. At its peak in the late 1990s, Venezuela pumped over 3 million barrels per day (bpd). Today, output hovers around 900,000 to 1 million bpd, with much of it sold clandestinely to buyers like China.
President Trump's vision is clear: revive Venezuela's oil industry with American expertise and investment. In his statements following the operation, Trump pledged that major U.S. oil companies would "go in, spend billions of dollars, fix the badly broken infrastructure—the oil infrastructure—and start making money for the country." This promise triggered an immediate market reaction on January 5, with U.S. oil stocks surging. Chevron Corp., the only American major still operating in Venezuela under a special sanctions waiver, saw its shares jump as much as 6.3%—the biggest intraday gain since April. ConocoPhillips and Exxon Mobil also rose, alongside oil-service giants Halliburton, SLB, and Baker Hughes, each climbing more than 5%.
Chevron: The Front-Runner in Venezuela's Oil Renaissance
Chevron is uniquely positioned to lead this revival. Unlike its peers, Chevron never fully exited Venezuela, even after Hugo Chávez's nationalizations in the early 2000s seized assets from companies like Exxon and ConocoPhillips. The company has maintained joint ventures with state-owned Petróleos de Venezuela S.A. (PDVSA), producing heavy crude vital for U.S. Gulf Coast refineries. Currently, Chevron accounts for about 20% of Venezuela's oil output—roughly 200,000 bpd—and has continued shipping crude to the U.S. despite escalating tensions, including a partial maritime blockade.
Analysts widely agree that Chevron stands to benefit the most immediately. Francisco Monaldi, director of Latin American energy policy at Rice University's Baker Institute, notes that a full industry revival could cost upwards of $100 billion and take years, but Chevron's existing infrastructure and expertise allow for quicker ramp-ups. Former Chevron executive Ali Moshiri estimates that with smaller operators, production could reach 1.5 million bpd within 18 months under stable conditions.
Chevron's spokesperson emphasized the company's focus on employee safety and regulatory compliance, adding that operations continue "uninterrupted." This steadfast presence has paid off: while Canadian heavy oil producers like Canadian Natural Resources, Cenovus Energy, and Suncor saw shares decline on fears of increased Venezuelan competition, U.S. firms celebrated the potential influx of compatible heavy crude.
European companies with stakes in Venezuela also gained. Italy's Eni and Spain's Repsol rose in early trading, while France's Etablissements Maurel & Prom surged up to 14%.
Historical Context: From Boom to Bust
Venezuela's oil story is one of squandered potential. Discovered in the early 20th century, its vast Orinoco Belt reserves made it a global powerhouse. Under Chávez and then Maduro, nationalization drove out foreign expertise, leading to rampant corruption, theft, fires, and chronic underinvestment. U.S. sanctions, intensified under previous administrations and maintained variably under Trump, isolated the sector further. The main buyer became China, with production plummeting amid economic collapse that triggered mass emigration.
ConocoPhillips and Exxon Mobil, owed billions from past expropriations (over $8 billion and $1 billion respectively, per arbitration rulings), have been cautious. Conoco called speculation on future activities "premature," while Exxon's CEO Darren Woods stressed caution due to historical asset seizures.
Yet Trump's approach flips the script. By removing Maduro indicted on serious chargesand signaling U.S. oversight during a transition, the administration aims to create a stable environment for investment. Interim leader Delcy RodrÃguez, sworn in amid controversy, has shown signs of dialogue, though tensions persist.
Challenges Ahead: Infrastructure, Investment, and Geopolitics
Reviving Venezuela's oil won't be easy. Experts warn of dilapidated pipelines, refineries like Amuay, and fields in the Orinoco Belt needing massive upgrades. Power outages, equipment theft, and skilled labor shortages compound the issues. Monaldi and others estimate decades for a return to peak production, with significant risks if legal and fiscal frameworks remain unclear.
Global reactions are mixed. Russia and China condemned the operation at the UN Security Council, while some Latin American nations expressed alarm over sovereignty violations. Domestically, Venezuelans grapple with hope and fear celebrations in exile communities contrast with loyalty rallies in Caracas.
For the oil market, implications are profound. Increased Venezuelan supply could pressure prices, benefiting U.S. refiners and consumers but challenging producers elsewhere. Heavy crude from Venezuela perfectly suits Gulf Coast complexes, potentially reducing reliance on Canadian oil sands.
Trump's pledge aligns with broader goals: energy dominance, countering narco-threats, and hemispheric influence. As traders like Trafigura seek U.S. guidance on resuming purchases, a "gold rush" atmosphere emerges.
Opportunities and Risks for Investors
For upstream players, Venezuela represents high-reward potential amid uncertainty. Chevron's foothold provides a low-risk entry, while others may negotiate debt settlements for new concessions. Service companies stand to gain from infrastructure rebuilds.
However, risks abound: political instability, lingering sanctions, and international backlash could deter capital. Environmental concerns in the fragile Orinoco region and human rights issues add layers.
Conclusion: A Pivotal Moment for Global Energy
The capture of Maduro and Trump's oil revival pledge mark a turning point. If successful, it could unlock vast reserves, bolster U.S. energy security, and reshape global flows. Chevron leads the charge, but the road is long and fraught.
As markets digest this, one thing is clear: Venezuela's oil future is intertwined with U.S. policy like never before. Investors, analysts, and policymakers will watch closely as this bold chapter
Source:Reuters
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