Venezuelan oil: between pie-in-the-sky plans and on-the-ground reality

Will the recent abduction of Venezuelan President Nicolas Maduro really change the game in the global oil market, as some commentators claim?

Probably not. The United States imports 6.6 million barrels of oil per day, including around 4 million barrels of heavy crude. Most of that comes from Canada and Mexico, two suppliers that mainly export denser, more sulfurous grades than US domestic production.

Two-thirds (about 0.6 to 0.7 million barrels) of the oil extracted in Venezuela (around 1 to 1.1 million barrels a day) is also considered "heavy", and is overwhelmingly exported. If it were entirely routed to the US, this could, it is true, represent a powerful negotiating lever against the Canadians, by far the leading US supplier today.

However, there is reason to doubt the feasibility of such a scenario. First because shipping by sea is far more expensive than transport by pipeline; second because US refineries are not equipped to refine Venezuelan crude, and upgrading them would require colossal investment - and in reality this would be out of reach.

This is without even mentioning the situation in Venezuela on the ground. Neutralising the head of the regime does not mean the end of the regime, which as things stand continues to exist as it did before Maduro's arrest, while the country's production and export infrastructure remains in ruins after decades of neglect, looting and sanctions.

In terms of volumes, Venezuelan output, after all, in 2025 was only a third of its level of 30 years ago. This shows how the national industry has completely collapsed.

While the political blow is undeniable, Donald Trump's pie-in-the-sky plans will likely remain a dead duck in a sector where projects running into tens of billions of dollars in investment are only undertaken once profitability is firmly guaranteed.

In this context, shareholders in US oil groups should be far less adventurous than the mercurial President Trump.

Likewise, forcing companies such as Exxon, Chevron or Occidental Petroleum to invest heavily in Venezuela would imply either immediate political stability (an unlikely scenario in every respect) or massive involvement by the US military in securing the infrastructure. However, the potential long-term profits that producers might realise would likely fall far short of offsetting these overall costs.

In this respect, there is reason to doubt that recent events have any real implications for the global oil market. By contrast, they should indeed upset the Chinese, Venezuela's main customer for securing its imports of heavy crude.