Editorial: Venezuelan baby steps

The oil and gas year started with a bang, literally, as the US launched airstrikes on Venezuela. Ostensibly, this was done as part of capturing its President, Nicholas Maduro. And that happened. But the real motivation was reconfirmed just days later, when Pres. Trump asserted that Venezuela “unilaterally seized and stole American oil.”

To facilitate as efficient a recapture of these hydrocarbons as possible, the US left the rest of Venezuela’s government intact. This happened despite years spent describing the horrors of its authoritarian socialist rule in trying to gin up not just support for but the perceived necessity of regime change.

It’s true that it was an increasingly terrible place to live. Just ask some of the nearly 8 million Venezuelan nationals who had relocated abroad by late 2025: more than 20% of its population. It was also a terrible place to do business, as ExxonMobil chief executive officer Darren Woods—as part of a group summoned to the White House to be pitched on the virtues of resuming in-country operations—reminded us when he described the country as “uninvestible.” 

Oil markets barely reacted to either the initial strike or the subsequent disinterest on the part of oil majors in getting back to work there, given Venezuela’s small contribution to global supply: roughly 1 million b/d, or 1%.

The path forward

As of Jan. 22, 2026, Vitol and Trafigura, the first two companies awarded export licenses to move the barrels post-Maduro, had sold 12 million bbl of Venezuelan crude (of the 50 million bbl initially agreed to with the US), the first two cargoes of which were bound for Europe. It’s a small first step, but one that indicates market interest in the barrels.

Looking further down the road, S&P Global CERA estimated that US Gulf Coast refiners “would be able to absorb an additional 300,000-400,000 b/d of heavy Venezuelan crude to raise coking utilization to 2024 levels,” noting that this would back out US light-sweet domestic production into the export market. Macquarie’s expectation is for Venezuelan production to increase by 200,000-500,000 b/d in the next 12-18 months, with a stretch scenario of 2-million b/d of recovered production by the end of the decade.

Venezuela’s government, meanwhile, has expressed interest in discussing reforms that would allow for increased participation by private companies in its industry. Interim president Delcy Rodriquez has also removed and replaced at least six top military officials perceived to have loyalties to Maduro.

As Francisco J. Monaldi, the Wallace S. Wilson Fellow in Latin American Energy at the Baker Institute for Public Policy’s Center for Energy Studies noted, however, “Venezuela’s oil will not return quickly. Markets should be cautious about expecting fast relief, because the real obstacles are political and institutional and history shows those barriers are difficult to remove.”

Monaldi also estimated that “under an appropriate contractual and tax regime, [Venezuelan] oil production would be profitable even at prices as low as $25-30/bbl.”

Big service companies are starting to talk about returning. As part of its fourth-quarter 2025 earnings report, Halliburton expressed the ability to resume its Venezuelan operations quickly once solid legal and commercial mechanisms were in place, pointing to infrastructure that has been preserved since it left the country in 2019. SLB also said it could make a rapid return.   

The steps that have been taken so far to normalize both social and commercial life in Venezuela are tiny, but they’re at least directionally helpful.