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Energy industry stocks and oil prices are rising after the U.S. seized Venezuelan President Nicolás Maduro and his wife in a military operation on Saturday.
In Wall Street trading on Monday, shares in Chevron — the only U.S. oil company operating in Venezuela — jumped $7.95, or 5.1%, on the day to close at $163.85. Exxon Mobil’s stock increased 2.2%, and ConocoPhillips gained 2.6%
Shares in other U.S. energy sector players also rose, with oil services giants Halliburton and Schlumberger both adding more than 10%. The price of U.S. crude rose 1.4% to $58.13 per barrel, while Brent crude, the international standard, climbed 1.2% to $61.50.
Oil industry players drifted up amid a broader surge in stocks on Monday, with the blue-chip Dow Jones Industrial Average adding 549 points, or 1.2%, to close at an all-time high of 48,977. The S&P 500 and tech-heavy Nasdaq Composite climbed 0.6% and 0.7%, respectively.
After Maduro’s capture, President Trump said U.S. oil companies would participate in rebuilding Venezuela’s decaying energy infrastructure.
Venezuela’s oil sector produces 750 million to 1 million barrels of crude oil per day, less than 1% of global output, according to OPEC data. The U.S., the world’s largest oil producer, produces 13.5 million barrels per day, while No. 2 Saudi Arabia pumps an estimated 10 million barrels.
Yet while Venezuela’s oil production has plunged in recent decades due to government mismanagement, underinvestment and the impact of U.S. sanctions, the country is sitting on proven reserves of more than 300 billion barrels — the world’s largest oil patch.
While experts think that significantly boosting oil production in Venezuela could cost upwards of $100 billion and take at least a decade, some Wall Street analysts foresee a potentially faster upgrade.
“Venezuela could realistically achieve production levels of 1.3–1.4 [million barrels per day] within two years of a political transition,” analysts with J.P. Morgan Markets said in a report.
“U.S. companies that may become involved in Venezuela are primarily major oil firms like Chevron, ExxonMobil and ConocoPhillips. Chevron already has a presence in the country, while others are exploring opportunities to recover previously expropriated assets and invest in Venezuela’s massive heavy crude reserves,” J.P. Morgan added. “There may also be interest from U.S Gulf Coast refiners seeking less costly sources of heavy oil.”
Venezuela produces thick crude with high amounts of sulfur and metal that is widely used to produce diesel, jet fuel and heating oil, among other uses.
Despite Venezuela’s ample oil reserves, David Oxley, chief climate and commodities economist at investment adviser Capital Economics, said the business case for investing in the country’s weakened energy sector is questionable, pointing to the high projected costs of extracting its “heavy” oil reserves.
“Crucially, we already expect lower oil prices to drive a modest decline in domestic U.S. oil production into 2027, and so the broader backdrop is hardly conducive to large-scale investments in new high-cost wells in Venezuela,” he said in a client note.
