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THE US strike against Venezuela has renewed attention on the country’s oil sector, which includes some of the world’s richest crude reserves.
“We’re going to rebuild the oil infrastructure, which will cost billions of dollars, and it will be paid for directly by the oil companies. And we’re going to make sure the oil flows the way it should,” President Trump said in a public speech Saturday after the attack, in which the United States captured Venezuelan President Nicolas Maduro and his wife.
Here’s what you need to know about Venezuela’s oil industry.
How much oil does Venezuela produce?
Venezuela, a member of the Organization of the Petroleum Exporting Countries, produces relatively little crude compared to other major oil-producing countries. The country produces about 1 million barrels of crude oil per day, less than 1% of global production, according to OPEC data.
Venezuela’s oil production exceeded 3 million barrels per day in the early 2000s, but it has fallen sharply in recent decades due to declining investment and the impact of U.S. sanctions. Due to US political pressure, Venezuela now exports most of its oil to China, according to Reuters.
For comparison, the United States – the world’s largest oil producer – produces 13.5 billion barrels per day, according to the Energy Information Administration. Saudi Arabia, the world’s second-largest oil exporter and top OPEC producer, pumps between 10 and 12 million barrels, while Russia, third, produces 9.4 million.
Francisco J. Monaldi, director of the Latin America Energy Program at Rice University, predicted that it would take at least a decade — and investments of more than $100 billion — to rebuild Venezuela’s oil infrastructure and increase production to 4 million barrels per day, which is well above its historic production levels.
But doesn’t Venezuela have more oil underground?
Yes, Venezuela is estimated to have the largest proven oil reserves in the world, with over 303 billion barrels, representing approximately 17% of the world’s total oil supply, according to OPEC. data watch.
“The bottom line is that the size of the reserves is only matched by those in the Middle East, the Persian Gulf and Canada’s reserves,” Monaldi told CBS News.
Venezuela’s reserves exceed those of Saudi Arabia, with 267 billion barrels, and exceed six. times American reserves. Most of Venezuela’s untapped oil is found in what’s called the Orinoco Belt, an area of about 21,000 square miles that stretches across the country’s northeastern region.
Are US oil companies already operating in Venezuela and is the US restricting the country’s oil industry?
Only one American oil company operates in Venezuela today: Chevron, based in Houston, which now represents 25% of Venezuelan oil production.
“No other major Western player produces a significant amount,” Monaldi told CBS News.
Other US energy giants, including Exxon Mobil and ConocoPhillips, withdrew from Venezuela after former President Hugo Chavez’s nationalization. foreign private oil interests from 2006.
Since 2005, successive U.S. presidents have imposed a series of sanctions on Venezuela, including its oil sector, for what U.S. officials have said is the country’s failure to crack down on drug trafficking and terrorism, as well as alleged human rights abuses.
Under former President Joe Biden, the United States in 2019 also froze the assets of Venezuela’s state-owned oil company, Petróleos de Venezuela (PDVSA), and banned Americans from doing business with the company.
More recently, the Trump administration imposed sanctions against four companies and associated oil companies that he claims have ties to the Venezuelan oil sector.
Earlier in December, Mr. Trump called for a “total and complete blockade” of all sanctioned oil tankers entering or leaving Venezuela and the United States. seized two sanctioned vessels.
Chevron can maintain its presence in Venezuela thanks to a waiver granted by the Biden administration in 2022, when the United States faced soaring inflation and energy prices. President Trump extended this special license last year.
How could a regime change in Venezuela affect oil prices?
Any significant disruption to global oil supplies could drive up energy prices around the world. Still, Venezuela’s limited crude production is likely to blunt any immediate impact on oil prices, which fell slightly Saturday afternoon, according to FactSet.
U.S. oil prices saw a sharp decline in 2025, falling about 20% and extending their decline over the previous two years. On Friday, the price of West Texas Crude (the American standard) fell to $57.32 per barrel, from nearly $80 per barrel. January.
Other factors could limit any near-term impact on domestic energy prices. U.S. crude production has surged in recent years, helping to drive down gas prices. The United States has also been boosting its strategic oil reserves, according to the Energy Information Administration, another potential protection for consumers and businesses against volatility in global oil markets.
“Global supply remains abundant, Venezuelan production represents a small share of global production and there is not yet clear evidence of lasting disruption to physical flows,” Nigel Green, CEO of investment advisory firm deVere Group, said in an email.
Wall Street analysts expect relatively little impact when U.S. financial markets reopen on Monday.
“Investors have faced a series of seemingly seismic geopolitical events in recent years (Ukraine, Gaza, Iran, Libya, etc.), but none have had a lasting impact on markets, and events in Venezuela are unlikely to be any different,” said Adam Crisafulli, head of investment advisor VitalKnowledge.
Meanwhile, the world’s major economies are growing at a pace that should keep oil prices in check, given the current surplus in crude reserves and sufficient production capacity of major producers, experts note.
In the short term, ending the U.S. blockade could even lower oil prices, Monaldi said. “Venezuela exported around 800,000 barrels before the blockade. If these return to the market, it will ease pressures.”
However, a prolonged decline in Venezuelan oil production could affect some energy costs. For example, the country produces a form of crude oil suitable for making diesel, which is widely used in many industries.
As a result, removing Venezuelan oil from global markets could drive up U.S. diesel prices and spur inflation, according to a recent report. analysis by the Atlantic Council, a nonpartisan group focused on global political and economic affairs.
“The limited impact on prices reflects where the barrels are going and the amount of capacity available. This does not mean the risk is negligible,” Green said.
Will American companies want to resume their activities in Venezuela?
To increase its oil production, Venezuela will have to rely on private investors because its state oil company, PDVSA, is in financial ruin, Monaldi told CBS News. This could allow American companies to re-enter the market. With new investment, Venezuela’s existing infrastructure would allow the country to increase its oil production relatively quickly, he added.
To be sure, any such investment will likely depend on political developments following the U.S. strikes and Maduro’s departure, Monaldi said, emphasizing that Venezuela should offer trade, tax and contractual incentives to attract U.S. energy producers.
“Venezuela has no limits in terms of resources,” he said. “It’s a question of politics.”
In the short term, Chevron will benefit the most, given its current presence in Venezuela, according to Monaldi. Other U.S. companies likely to bring business back to Venezuela include ConocoPhillips and Exxon, he added.
