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The US military capture of Venezuelan President Nicolás Maduro is one of the most consequential geopolitical events to hit energy markets in years. Officially justified as a move to restore democracy and regional stability, the operation has immediately revived a much older and more sensitive question: who controls Venezuela’s oil, and why now?
President Donald Trump said the United States would assume control over Venezuela’s vast oil reserves and enlist American energy companies to invest billions of dollars in rebuilding the country’s severely degraded oil infrastructure.
Despite Venezuela holding the largest proven oil reserves in the world, the oil market’s initial reaction was strikingly muted. Crude prices barely moved, a reminder that today’s global energy system is impacted less by headline shocks and more by structural supply and demand fundamentals. Still, beneath the surface, the arrest of Maduro carries profound implications for oil geopolitics, US energy strategy and long-term price formation.
Timing matters. Venezuela under Maduro had become increasingly aligned with China, Russia and Iran, allowing rival powers to deepen their presence in what Washington still considers its strategic sphere of influence. Caracas had accepted non-dollar payments for crude, strengthened ties with the BRICS bloc and reportedly hosted Iranian drone manufacturing facilities while Russian military advisers operated on Venezuelan soil.
From Washington’s perspective, Venezuela was no longer just a failed petrostate but a geopolitical outpost. The intervention therefore appears less about drug trafficking and short-term oil supply but more about reclaiming strategic control over energy flows, limiting rival influence in Latin America and reasserting leverage over a resource that still underpins global powers.
Saturday’s events highlight a deepening geopolitical fragmentation. The United States is recalibrating its economic and strategic relationships with the world, as outlined in its latest National Security Strategy. We are closely monitoring how this regional fragmentation unfolds and the broader implications it may carry.
Venezuela’s oil collapse did not begin with US sanctions. The roots go back to the Chávez era, when foreign oil companies were forced to surrender operational control to the state-owned PDVSA. Contracts were rewritten, assets were expropriated and capital began to flee.
Chevron chose to stay, negotiating joint ventures and maintaining a reduced but continuous presence. Exxon Mobil and ConocoPhillips exited the country and later pursued international arbitration, winning multibillion-dollar claims that Venezuela never paid. As foreign expertise left, PDVSA became increasingly politicised, underfunded and incapable of maintaining even basic operations.
By the time Maduro took power, the industry was already hollowed out. US sanctions imposed in 2019 did not cause the collapse, but they accelerated it sharply by cutting off export markets, restricting access to finance and preventing the import of diluents needed to process Venezuela’s heavy crude. Production plunged from more than 3 million barrels per day in the early 2000s to roughly one million barrels per day last year, despite Venezuela sitting on an estimated 303 billion barrels of proven oil reserves.
Despite the scale of the intervention, oil prices remained muted and the explanation lies in oversupply.
New production is coming online from the United States, Brazil, Guyana and Argentina at a time when OPEC+ is unwinding voluntary output cuts and global demand growth remains subdued. In this environment, Venezuela’s current output, representing less than 1% of global supply, is simply too small to move the market.
The oil market understands that production cannot be restarted overnight and even dramatic political change does not translate into immediate barrels.
Source: TradingView. WTI Oil daily price chart as of 7 January 2026.
Venezuela’s relevance is not about how much oil it produces today, but about the type and amount of oil it holds. Its crude is heavy and sour, similar to Canadian oil sands, and many US Gulf Coast refineries were originally designed to process Venezuelan barrels.
Despite being the world’s largest oil producer, the United States remains structurally dependent on heavy crude imports. A large share of US refining capacity runs most efficiently on this type of feedstock, particularly for diesel and industrial fuels. Sanctions on Venezuelan oil tightened those markets, and Canada has since become the dominant supplier.
This is where Venezuela could re-enter the system over time. Chevron is widely expected to be the anchor operator, given its continued presence and technical familiarity. Exxon Mobil and ConocoPhillips may also return, though only under new political and commercial conditions.
Venezuela’s oil infrastructure is severely degraded, and expectations of a rapid revival are misplaced. Pipelines are decades old, production facilities are corroded and technical capacity has eroded.
Estimates suggest it would take tens of billions of dollars just to restore production to historical peaks. Even under a stable, US-aligned government, early efforts would focus on stabilising existing output rather than expanding it. Meaningful growth would likely take close to ten years.
Washington has also made it clear that US oil companies would be expected to fund much of the rebuilding themselves before recovering compensation linked to expropriated assets. That condition introduces significant financial and political risk, making boards and shareholders cautious.
In the near term, Venezuela’s political reset changes very little for crude prices. Perception may move faster than reality, but physical supply will not. Over the longer term, however, Venezuela’s gradual return could act as a ceiling on oil prices, particularly if global oversupply persists. Additional heavy crude would pressure Canadian producers and add complexity to OPEC+ efforts to manage the market.
US oil majors rallied sharply following Maduro’s capture, not because investors expect an immediate surge in production, but because the event creates long-term opportunity.
Access to the world’s largest oil reserves, improved refinery economics from heavy crude availability and the prospect of strategic alignment with US policy all add to the investment case. Chevron stands out as the most direct beneficiary, while Exxon Mobil and ConocoPhillips can gain leverage if they consider re-entry.
However, this is not a short-term earnings story, rather a long-term opportunity, therefore we think the initial rebound is likely to be short lived.
Professional investors looking for magnified exposure to WTI Oil may consider Leverage Shares +3x Long Oil & Gas or -3x Short Oil & Gas ETP.
Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at
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