Crude oil prices are experiencing a slight decline as the recent ousting of President Nicolas Maduro has thrown a shadow of uncertainty over Venezuela, a nation rich in oil resources.
On Sunday, U.S. crude oil prices dipped by 31 cents, translating to a decrease of 0.54%, bringing the price down to $57.01 per barrel. Similarly, the global benchmark, Brent crude, saw a minor drop of 22 cents, or 0.36%, reaching $60.53 per barrel.
President Donald Trump made it abundantly clear on Saturday that a significant goal behind the regime change in Venezuela is to secure U.S. investments in the country’s oil sector. During a press conference at his Mar-a-Lago residence in Palm Beach, Florida, he stated, "We’re going to have our very large United States oil companies — the biggest anywhere in the world — go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure."
It’s important to note that the U.S. embargo on Venezuelan oil remains firmly in place, which complicates the situation further. Venezuela is not only a founding member of OPEC but also boasts the largest proven crude oil reserves globally, with a staggering total of 303 billion barrels, accounting for approximately 17% of worldwide reserves, as reported by the U.S. Energy Information Administration.
Historically, Caracas produced around 3.5 million barrels per day during its peak in the late 1990s; however, there has been a dramatic decline in production since that time. Current data from energy consulting firm Kpler indicates that Venezuela is now producing roughly 800,000 barrels per day.
At present, Chevron is the sole major U.S. oil company maintaining operations in Venezuela, exporting about 140,000 barrels per day by the end of the fourth quarter of 2025, according to Kpler.
Daan Struyven, who leads oil research at Goldman Sachs, has commented that the short-term effects of Maduro's removal on oil prices are unclear. He explained that production might increase if a government favored by the U.S. is established and if sanctions against Venezuela are lifted. However, he also warned that Maduro's departure could lead to temporary disruptions in supply. Looking further ahead, increased U.S. investment aimed at enhancing Venezuelan production could exert downward pressure on oil prices, although any recovery in output is expected to be gradual and partial.
Oil executives involved in Venezuelan operations estimate that it would require an investment of around $10 billion annually to revive production levels. They emphasize that a stable security environment is crucial for restoring production to historical highs. Helima Croft, who heads global commodity strategy at RBC Capital Markets, stated that complete relief from sanctions could potentially bring back several hundred thousand barrels of production within a year, provided there is a smooth transition of power.
"However, all bets are off in a chaotic change of power scenario like what occurred in Libya or Iraq," Croft cautioned, highlighting the unpredictable nature of political transitions in such contexts.
