The dramatic capture of President Nicolás Maduro by U.S. forces on January 3, 2026, followed by the rapid seizure of national oil infrastructure, has ignited a fresh geopolitical flashpoint with profound implications for global energy. In the immediate aftermath, President Donald Trump announced plans via social media to acquire and sell between 30 and 50 million barrels of Venezuelan oil. This bold move directly targets the world’s largest proven reserves—totaling 303 billion barrels, or roughly 17% of the global supply.
Recent data from Kpler, a leading data and analytics firm, shows production dipping toward 800,000 barrels per day (bbl/d) from 1.1 million bbl/d by late 2025, as export blockades and storage limits take hold, forcing Petróleos de Venezuela, S.A. (PDVSA), the state-owned oil and gas company, to utilize onshore tankers for unsold crude. Despite this localized turmoil, global markets remain remarkably calm; Brent prices held around $65 per barrel as of mid-January. This stability underscores a well-supplied global market supported by OPEC+, US shale, and rising output from Guyana. The situation now raises a pivotal question: will this intervention trigger a short-term price spike, or will it unleash a wave of heavy crude that reshapes markets for years to come?
Immediate Market Shock: Limited Disruption
While the global energy market initially reacted with alarm, causing a brief spike in prices, the volatility quickly subsided. Traders soon recognized that Venezuela’s exports were already severely hamstrung by years of sanctions and “shadow fleet” operations. Providing deep expert context to this volatility, Homayoun Falakshahi’s article in Kpler, “Maduro Captured: Venezuela’s Oil Future at a Crossroads,” identifies this moment as a critical turning point for the nation’s energy sector. He notes that production has already begun to slip largely because PDVSA has been forced to utilize vessels for floating storage amid a tightening U.S. blockade.
Furthermore, Falakshahi warns that while current onshore storage buffers of 15–20 million barrels (mmbbl) can sustain these operations for approximately six to eight weeks, a continued stalemate will likely trigger accelerated shut-ins in the Orinoco Belt in central-eastern Venezuela. Consequently, without a swift political transition or the lifting of sanctions, output is projected to fall further to between 600,000 and 700,000 bbl/d in February, potentially cratering to just 200,000 bbl/d by the second quarter if critical diluent imports remain blocked.
Despite these regional threats, broader market analysts, including those at the IEA, see minimal near-term risk to global supply. They argue that any potential ramping of Venezuelan production would yield “limited short-term gains” given the current global oversupply. In the meantime, heavy crude alternatives from Canada, Saudi Arabia, and Guyana are readily available to fill any gaps. Consequently, while a geopolitical risk premium of approximately $10/bbl lingers in escalation scenarios, markets are currently pricing in a period of relative stability under U.S. oversight.
The Long Road from Decay to Potential
The long-term outlook for Venezuela is a study in contrast between current ruin and massive latent potential. The sector currently languishes from decades of underinvestment and corruption; production has plummeted from a 1998 peak of 3.5 (mmbbl/d) to 800,000 bbl/d (less than 1% of global supply). Rehabilitating the corroded infrastructure in the humid Orinoco Belt will require billions in capital to fix wells, pipelines, and power systems.
Despite these hurdles, energy giants see a major opportunity. Chevron is already targeting growth from its current share, while Repsol aims to triple its output, and Exxon is preparing technical teams to assess the region. According to the Center for Strategic and International Studies (CSIS), modest repairs could bring output to 1.5 mmbbl by 2028, with a path to 3 mmbbl by 2035 if major investment is secured.
As noted in an Americas Quarterly report, restoring production to these levels would effectively add the equivalent of a mid-sized OPEC producer to the world’s supply. Such a shift would intensify competition among heavy crude exporters like Saudi Arabia, Iraq, and Russia. However, the path remains treacherous. A report by Direct Industries warns that PDVSA’s facilities are so fragile that a chaotic political transition could cause a short-term production drop of 50%. This fragility explains why leaders like Exxon CEO Darren Woods remain cautious, even as the Trump administration seeks $100 billion in industry pledges to fuel a comeback.
U.S. Strategy: A Controlled Revival
Current U.S. policy appears focused on controlling oil flows rather than simply flooding the market. While a formal export ban persists, rules allow firms like Chevron to invest now and recover profits later. This strategy prevents undercutting U.S. shale while positioning Venezuela as a strategic lever against China, its top buyer. President Trump has emphasized that interim authorities will hand over oil control to the U.S., with proceeds “used for the benefit of the people of Venezuela and the United States.”
Experts, however, urge patience regarding the “flood” of oil. Phil Flynn, Senior Market Analyst at The PRICE Futures Group, told Egypt Oil & Gas:
“Right now the market is in balance. There is a tightness of supply when you look at the {heavy crude oil grades, but it will take a little time for that flood of oil to come from Venezuela, but I do expect that this will lead to an era of more stable prices.”
Flynn also identified security as a primary concern:
“The oil companies have to make sure that their people are safe and secure and that their contracts will be honored. I do think with the Trump administration strength that this is not going to be a problem, but it’s definitely a concern.”
If these security and infrastructure hurdles are cleared, the Council on Foreign Relations suggests that a $100 billion investment could eventually allow Venezuela to rival producers like Canada or Iraq.
Global Pricing and OPEC+ Pressure
In the short term (2026–2027), prices are expected to remain range-bound between $52–56/bbl. Heavy crude differentials will likely stay wide due to competition from Canada and Guyana, a situation that favors U.S. Gulf Coast refiners looking for discounted grades.
In the medium term, however, a recovery to 2 mmbbl/d would pressure OPEC+ cohesion. Ole Burkhard of S&P Global estimates that reaching 1.5 mmbbl/d is possible “within a year or two,” which would be bearish for prices. Furthermore, Goldman Sachs estimates that a full recovery could create a $4/bbl downside to global prices by 2030. While this benefits adaptable refiners, it would strain the fiscal balances of Latin American exporters like Colombia.
These projections come with a caveat. Helima Croft, Head of Global Commodities Strategy at RBC Capital Markets, warns:”Venezuela’s oil infrastructure is in disrepair after years of neglect and sanctions, so it could take years and major investments before production can increase dramatically. All bets are off in a chaotic change of power scenario like what occurred in Libya or Iraq.”
Wasted Reserves and Geopolitical Ripples
Beyond oil, Venezuela holds 200 TCF of gas reserves—the largest in Latin America—yet it currently flares roughly 40% of its output. While the country is not an LNG exporter, stability could enable new pipelines to Colombia and Trinidad, adding 1–2 bcf/d to the regional market and bolstering the Caribbean energy grid.
Ultimately, the US–Venezuela saga represents a potential supply overhang rather than a crisis. Regional stability now hinges on an orderly transition to avoid a refugee crisis in Brazil and Colombia. For stakeholders in the Middle East and North Africa (MENA), the primary focus must be on how OPEC+ responds to this emerging supply risk. As Venezuela moves toward potentially rejoining the market as a disciplined player, its unlocked reserves could redefine the dynamics of heavy crude by the end of the decade, cementing lower, more stable prices for the long term.
