The United States has launched a military strike on Venezuela, specifically targeting the country’s significant oil sector. This operation comes as U.S. forces captured Venezuelan President Nicolás Maduro and his wife during the action. In a public address on Saturday, President Donald Trump outlined plans to rebuild Venezuela’s oil infrastructure, stating that the initiative would cost billions of dollars and be funded directly by oil companies.
The focus of the U.S. strike is Venezuela’s oil industry, which is home to some of the world’s richest crude reserves. Despite this wealth, Venezuela’s oil production has dramatically decreased over the years. According to data from the Organization of the Petroleum Exporting Countries (OPEC), Venezuela currently produces approximately 1 million barrels of crude oil per day. This figure represents a steep decline from over 3 million barrels per day in the early 2000s, largely due to diminishing investment and the effects of U.S. sanctions.
Venezuela possesses the largest proven oil reserves globally, estimated at over 303 billion barrels, which constitutes more than 19% of the total global supply. This figure surpasses that of Saudi Arabia and is more than six times that of the United States. The majority of these reserves lie within the Orinoco Belt, a vast area in the northeastern part of the country.
Currently, the only American oil company operating in Venezuela is Chevron, which accounts for about 25% of the country’s oil production. Other major U.S. firms, such as Exxon Mobil and ConocoPhillips, withdrew from Venezuela after former President Hugo Chavez nationalized foreign oil interests in 2006. Since then, the U.S. has imposed various sanctions on Venezuela, particularly targeting its oil sector for alleged drug trafficking, terrorism, and human rights violations.
The Biden administration has allowed Chevron to maintain its operations in Venezuela under a waiver granted in 2022 amid rising inflation and energy prices. Trump extended this special license last year. The U.S. has also enacted sanctions on several companies and oil tankers linked to Venezuela’s oil industry, and in December, Trump called for a “total and complete blockade” on all sanctioned oil tankers entering or leaving Venezuela.
The consequences of regime change in Venezuela could have implications for global oil prices. Although any significant disruption to oil supplies typically triggers price increases, Venezuela’s current production levels may limit the immediate effect. On the day of the strike, oil prices saw a slight decline, with West Texas Crude dropping to $57.32 a barrel, down from nearly $80 in January 2025.
Experts suggest that the U.S. has bolstered its Strategic Petroleum Reserve, which could help cushion consumers from fluctuations in global oil markets. Nigel Green, CEO of the investment advisory firm deVere Group, indicated that “global supply remains ample,” noting that Venezuelan production represents a minor portion of overall output.
In the longer term, the potential for U.S. companies to re-enter the Venezuelan market hinges on the country’s willingness to provide commercial and fiscal incentives. With the state-run oil company, Petróleos de Venezuela (PDVSA), facing financial difficulties, Venezuela may need to attract private investment to revitalize its oil production. Monaldi emphasized that the country’s abundant resources are limited by political factors.
As the situation unfolds, Cheron stands to gain the most from any renewed interest in Venezuelan oil, given its established presence. Other U.S. companies like ConocoPhillips and Exxon may also consider re-entering the market, depending on future political developments.
The implications of the U.S. military action in Venezuela extend beyond geopolitical dynamics, affecting global energy markets and the economic landscape in both countries. As the world watches closely, the future of Venezuela’s oil sector and its impact on international oil prices remains uncertain.
