The United States and its oil industry will take control of Venezuela’s diminished energy sector after U.S. forces attacked the South American OPEC member and captured its leader and his wife, President Donald Trump said.
Given the industry’s state of disrepair, it could take several years for Venezuelan oil production to recover to meaningful volumes. U.S. oil majors have so far been silent on any plans to rebuild Venezuela’s oil industry.
Nonetheless, the toppling of socialist leader Nicolás Maduro threatens to transform the hemisphere’s crude oil markets – possibly weakening prices – on the prospect of Venezuela’s heavy oil production returning to feed American refineries. That would put it in competition with the Canadian output that dominates U.S. imports.
Trump says U.S. will ‘run’ Venezuela after capturing Maduro in military strike
Mr. Trump said on Saturday that Venezuela, which has the world’s largest oil reserves, “stole” U.S. assets almost two decades ago after American oil companies developed fields in the country, and postattack they will now return to revive the industry.
“We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars to fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” he said at a news conference. “We’re going to be taking a tremendous amount of wealth out of the ground.”
Mr. Trump suggested he intends to intensify competition in oil markets as production in Venezuela increases. “We’ll be selling large amounts of oil to other countries,” he said.
The initial reaction when markets open on Monday could be similar to last June, when the U.S. bombed nuclear sites in Iran after days of increasing tensions, said Rory Johnston, oil market analyst at Toronto-based Commodity Context. Prices at the time jumped initially but fell back when it became clear that no oil installations were targeted, even in retaliation.
“I don’t think it’s the exact same because prices haven’t been driven up to fall back down, but there has been a buildup,” he said. “But nabbing Maduro in the night is essentially the corollary of bombing all the nuclear sites – the biggest, flashiest thing they could do.”
The U.S. assault on the founding member of the Organization of the Petroleum Exporting Countries coincides with an era of low oil prices, and forecasts for more of the same. The prospect of a resumption of Venezuelan supplies in global markets after years of U.S. sanctions could add to the weakness, said Phil Flynn, energy market analyst at the Price Futures Group in Chicago.
Members of OPEC+, which includes Russia and Kazakhstan, said on Sunday they were committed to stability in oil markets, without mentioning the developments in Venezuela. They said in a statement they were sticking with a November decision to pause increases in output for the first three months of 2026.
In 2025, crude suffered its worst annual loss since 2020, falling 20 per cent against a backdrop of surplus supplies and uncertain global economic conditions. U.S. benchmark oil closed down 10 US cents on Friday at US$57.32 a barrel.
“Obviously the potential of the U.S. getting back into Venezuela should increase oil production expectations quite dramatically, and it should put more pressure on Russia because of the competitive nature of the oil,” Mr. Flynn said.
Both Canada and Venezuelahave massive reserves of heavy oil, and many refineries in the U.S. Midwest and Texas are designed for the extra processing such supplies require to manufacture gasoline, diesel, jet fuel and chemicals.
“There’s definitely going to be more competition for heavy oil, and Canada and Russia are going to see that over time,” Mr. Flynn said. “I think, though, it’ll be a net positive for the [U.S.] economy.”
Venezuela currently produces about one million barrels a day, a third of its output at the beginning of the century.
In 2013, the U.S. imported about one million barrels of Venezuelan crude a day. That slowed to a trickle – and months of zero shipments – after the U.S. imposed sanctions in 2019. In that time, China became Venezuela’s top customer.
By contrast, Canada shipped 2.7 million barrels a day to the United States – largely to refineries in the Midwest – in 2013, increasing to a peak of nearly 4.4 million in mid-2024. Last year, exports to the U.S. fell back to below four million a day as more oil was shipped to Asia via the newly expanded Trans Mountain pipeline to the Pacific coast.
The startup of that expansion, which nearly tripled capacity to 890,000 barrels a day, has contributed to a sharp decrease in the price discount Canadian oil had suffered previously.
Should sanctions be loosened, the major point of competition for Canadian versus Venezuelan heavy crude would be in the U.S. Gulf Coast region, which is already well supplied by Canada, said Mr. Johnston of Commodity Context.
The result could be that demand for Canadian crude would fall in that region, with some shipments rerouted to the uncommitted capacity on the Trans Mountain pipeline or re-exported to other countries from the U.S. Gulf Coast.
For the former, it would mean higher pipeline tolls, and for the latter, added transport costs. “In both those cases, the net result is low realized netbacks for Canadian producers,” Mr. Johnston said.
Because of the extensive pipeline network between Alberta and the Midwest, Canada should retain its dominance in that market, he said.
Chevron Corp. CVX-N +5.01%increase is the only U.S. oil company remaining in Venezuela after then-president Hugo Chávez ordered all foreign companies to convert their assets to majority ownership by state-owned Petróleos de Venezuela SA in 2006 and 2007. Other oil majors, including Exxon Mobil Corp. XOM-N +2.04%increase and ConocoPhillips Co. COP-N +2.83%increase, refused to accept the terms, and their assets were seized.
On Saturday, Chevron did not divulge its plans for the country with a change in leadership. “Chevron remains focused on the safety and well-being of our employees, as well as the integrity of our assets. We continue to operate in full compliance with all relevant laws and regulations,” spokesman Kevin Slagle said in a statement.
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