On Wednesday, Energy Secretary Chris Wright arrived in Caracas to assess firsthand the devastated oil industry that the United States plans to rebuild. The stakes are high: “There is a probably that the United States will not be energy self-sufficient in ten years,” said Natasha Kaneva, managing director of global oil and commodities research at JP Morgan Chase & Co., in a presentation at the Council on Foreign Relations. “Venezuela ticks all the boxes: it’s in the Western Hemisphere, U.S. companies already operate there, and the grade [of crude] is exactly what the United States needs: 70% of the refining capacity on the Gulf Coast is built to process Venezuelan oil, heavy crude.”
Thus, in less than a month after Nicolás Maduro’s capture, the Venezuelan oil industry went from being on the sidelines of the global conversation to being at the center of a media storm. Oil production is poised for growth in the short term, although structural limitations persist that could hinder a new boom.
We explain the challenges, expectations and realignment of Venezuelan oil in 2026 and the country’s new energy cycle: from the gradual return of Venezuelan crude to international markets and the easing of sanctions to the technical and institutional bottlenecks that still limit its expansion.
Baby, you’re a rich man: the return of Saudi Venezuela
Venezuela’s main oil advantage is no secret to anyone: it is (at least on paper) the country with the largest proven reserves in the world —around 303 billion barrels, or the equivalent of 17% of the world total— and it has a privileged geographical location, as it is close to the US refineries in the Gulf of Mexico designed to process heavy crude.
This explains why the first sign of activity in the sector isn’t appearing in drilling operations or announcements of large capital injections, but rather in concrete commercial contracts. For example, Valero Energy —a key player in the Gulf of Mexico—confirmed purchases of Venezuelan crude for February and March, indicating that these volumes would constitute a significant portion of its oil mix and could even exceed pre-sanctions levels.
Also, Citgo –owned by the Venezuelan state, but which cut ties with PDVSA in Venezuela after the opposition took control of the company during the 2019 presidential crisis– bought its first shipment of Venezuelan oil since 2019 from the trading company Trafigura, one of the most symbolic indicators of this new stage that seems to point to Venezuela once again fitting into the North American value chain.
This logistical advantage is compounded by an explicit shift in geopolitical interpretation from Washington, with an energy policy toward Venezuela that, for now, does not aim for full normalization, but rather a monitored opening. Donald Trump himself incorporated Venezuela into his international energy discourse, designating it as a key element for the US to consolidate its position as a global energy leader. In subsequent statements, he went further: he announced that India would begin purchasing Venezuelan oil and affirmed that he would welcome investments from China and India in the Venezuelan oil sector, with a view to creating alternatives to replace Russian or Iranian supplies.
OFAC’s new licenses for Venezuelan oil
This political shift has translated into concrete actions: A few days ago, OFAC issued General License 46, which facilitates the trading, transportation, and refining of Venezuelan oil by U.S. companies and traders, reducing the need for individual, case-by-case licenses. In other words, it lowers the barrier for Venezuelan crude to return to major markets, albeit still with conditions and oversight. This operational framework was later further refined with General License 47, which clarified and expanded the permitted transactions—such as logistics, insurance, and related services—reducing friction for traders, refiners, and service companies. The arrival of heavy naphtha shipments from the U.S. is another significant sign.
Then, on February 10, OFAC issued new licenses: 46A, which allows transactions for the transport, export, and sale of Venezuelan crude by U.S. companies; 30B, for the use of ports and airports and the export of diluents needed for Venezuelan heavy crude; and 48, to authorize the supply of goods and services for the maintenance and operation of the industry. Finally, it stipulates that all contracts signed must comply with U.S. law and that each transaction must be properly reported to the Department of the Treasury.
This dynamic is further supported by quantitative evidence: Venezuelan oil exports rebounded in January to nearly 800,000 barrels per day, compared to less than 500,000 bpd in December 2025, driven by new licenses, US purchases and the reactivation of previously held shipments.
Wildcatters paving the way: Which oil companies are going to enter Venezuela?
Meanwhile, international interest is gradually recovering. In the short and medium term, the Venezuelan oil industry is poised to be dominated by so-called wildcatters, or small and medium-sized companies —new players with a considerable appetite for risk— alongside Chevron, Repsol, Maurel & Prom, and Eni, whose continued presence will be the primary indicator used by markets to restore their confidence in the country. The sustained success of these companies could be key to attracting major investments once again.
Large Western companies already operating in the country have sought to expand their activities, but with a cautious strategy, relying on existing infrastructure without significant additional capital commitments. In fact, Chevron strengthened its logistics during January, increasing its fleet to 15 vessels for transporting Venezuelan crude, a sign that export activity is intensifying in practice.
Around these companies, an ecosystem of global traders like Vitol and Trafigura has also emerged, becoming key players in the short term, not because they are seeking to rebuild oil fields or produce new oil, but because they move existing barrels, securing buyers and immediate cash flow. This is no small matter: after years of isolation, this flow allows for the reactivation of exports and the maintenance of existing operations, without waiting for the large upstream investment that depends on medium-term structural conditions.
This network also includes service companies. Firms like SLB and Halliburton are once again involved in repair, maintenance, and modernization work on existing fields, attracted by the easing of licensing requirements and the possibility of operating under controlled-risk schemes, where they could incorporate technology, services, and efficiency to generate growth in the sector.
The range is wide: Bloomberg reported the shipment of Venezuelan crude to Israel for the first time in years; in gas, the British company BP confirmed that it is seeking an OFAC license to develop a cross-border field with Trinidad and export that gas as LNG from Trinidadian infrastructure, while traders began preparing exports of liquefied natural gas from Venezuela.
In the region, Ecopetrol is considering resuming gas imports from Venezuela if sanctions relief is consolidated. The Indian company Reliance has also purchased two million barrels of Venezuelan crude, while the US energy technology firm Baker Hughes sees a significant revenue opportunity in the country, contingent on security and regulatory clarity. According to Monaldi, ConocoPhillips could also become a major player in an attempt to recover its enormous debt, although the company has ruled out returning until it receives compensation for its assets expropriated by the government of Hugo Chávez.
Are we facing a new oil boom?
The recent reform to the Hydrocarbons Law represents a paradigm shift for the oil sector, opening up crude oil production and marketing to greater private participation after half a century of state control. However, crucial issues remain to be defined, such as the tax burden resulting from the new hydrocarbons tax once implemented and the ambiguous language regarding the possibility of resolving disputes through arbitration. This reform was accompanied by the general licenses issued by the Office of Foreign Assets Control (OFAC).
This new landscape has brought positive reactions: in a matter of days, Darren Woods, CEO of ExxonMobil, went from considering Venezuela “un-investible” to highlighting his company’s technological advantages for heavy crude extraction. Meanwhile, Mike Wirth, CEO of Chevron, reaffirmed his commitment to collaborating with the U.S. and Venezuelan governments to increase production in the short term.
However, major oil companies like Exxon, Shell, Total, and BP need more time and clear signals before making a strong entry into the market. Both Woods and Wirth emphasized that it is too early to commit to large-scale investments. Chevron, in particular, has been clear that its focus is on reinvesting locally generated cash flow and expanding incrementally.
Additionally, its current financial strategy has focused on a strong capital discipline, prioritizing shareholder profitability over aggressive production expansion.
The winds blowing against Venezuelan oil
Venezuelan crude, however, presents challenges. According to experts like Francisco Monaldi, economist and director of the Latin America Energy Program at the Baker Institute, a risk factor in the Venezuelan oil industry that has hindered its recovery is not the quality of the crude or the lack of reserves, but rather institutional instability.
Monaldi has pointed out that numerous investment attempts have been thwarted by a lack of legal certainty, arbitrary renegotiations, and the perception that agreements can be unilaterally altered. Therefore, a necessary condition for revitalizing the industry is to move toward a solid institutional framework, with robust contracts, protection of rights, and independent arbitration mechanisms.
However, Venezuelan oil faces technical challenges that complicate its competitiveness: most of its reserves are located in the Orinoco Belt and consist of extra-heavy crude, highly viscous and with a high sulfur content, requiring imported diluents and constant infrastructure maintenance for extraction, transportation, and processing. These characteristics force it to be sold at discounts of $7 to $12 per barrel compared to WTI crude, while its break-even point is estimated between $42 and $56, leaving narrow margins in the current price environment. In this context, the Jose Complex is key to making the crude an exportable product, but the combination of relatively low prices —with Merey 16, the Venezuelan benchmark crude, below its recent averages— and the enormous investment needed to recover its early 2000s production levels, estimated at around $183 billion by Rystad Energy, constitute a significant barrier to the industry’s full recovery.
But not all the obstacles are internal, as Venezuela is not the only oil-producing country in the region: Its formal reintegration into the market is occurring while countries like Brazil, Argentina, and Guyana —whose oil exports include the US among their main destinations— plan to substantially increase their production this year. Another player to consider is Canada, which, although experiencing political tensions with the Trump administration, remains the main exporter to the US of crude oil with characteristics comparable to Venezuela’s.
In fact, Canadian Prime Minister Mark Carney stated in an interview that “Canadian oil will be competitive because it is low risk and low cost,” conditions that are not guaranteed in Venezuela at the moment.
The future of Venezuelan crude: 4 million barrels per day?
At the same time, these challenges coexist with structural advantages that are uncommon in the global industry. Venezuela has relatively low geological risks and an extensive network of oil brownfields with existing—albeit deteriorating— infrastructure, which reduces the marginal costs of reactivation compared to entirely new projects. Despite the technical difficulties of extra-heavy crude, its monetization remains viable in scenarios where prices exceed $40 per barrel, and the recent opening of the legal framework to private investment introduces, for the first time in decades, the possibility of incorporating large-scale international capital, technology, and management. If the regulatory transition can be sustained and political risks mitigated, this starting point could allow for a gradual but significant expansion of production in the coming years.
According to Monaldi, production could increase by at least 600,000 barrels per day within two to four years. Of that, 150,000 would come from Chevron, 200,000 from Maurel, ENI, and Repsol, and 250,000 from other Production Participation Contracts (CPPs). Ten-year estimates project an increase of between 1.5 and 3 million additional barrels per day, he said during local firm Ecoanalítica’s February Perspectivas forum.
At the forum, Monaldi presented several scenarios for increasing Venezuelan production between 2026 and 2036, ranging from stagnation if the status quo continues (around 1.4 million barrels per day at the end of the period) to a technically ambitious scenario exceeding 6 million bpd. However, Monaldi believes the realistic scenario for 2036 ranges between 2.6 million bpd and 4.1 million bpd. Rystad’s projections are more conservative in the short and medium term: its baseline scenario points to a return to around 3 million bpd by 2040, implying a much slower expansion path.
While not yet a full-blown oil boom, Venezuela finds itself in a new scenario where its oil is gradually returning to major markets. This new cycle opens a phase of unprecedented opportunities, provided there is regulatory clarity and continuity in the relationship with the United States. Economists like Asdrúbal Oliveros have mentioned that if this agreement materializes, Venezuela’s oil production could expand by 30%, with positive impacts on macroeconomic expectations and potential improvements in other critical economic variables.
After years of collapse, sanctions, and disconnection, the fact that Venezuelan oil is moving again—even if cautiously and under supervision—is, in itself, a very positive development.
