Venezuela regime change: energy market implications
Expert analysis exploring the consequences to global oil supply, regional refining systems and energy security in the Atlantic Basin
Political upheaval is reshaping the energy landscape
Venezuela’s energy sector is once again at an inflection point, shaped by political upheaval, shifting international leverage and the persistent weight of sanctions.
As power dynamics evolve and external actors reassess their engagement, the country’s vast hydrocarbon endowment has re-emerged as a variable with potentially meaningful consequences for global oil supply, regional refining systems and energy security in the Atlantic Basin.
Impacts on the energy industry
For the energy industry, the central questions are strategic rather than technical:
- How quickly - and under what conditions - could Venezuelan production and refining capacity return to relevance?
- What constraints will continue to limit recovery across upstream, midstream and downstream assets?
- How should companies and policymakers weigh resource scale against political risk, fiscal uncertainty and long-term capital requirements when evaluating Venezuela’s role in future energy markets?
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Expert insight and analysis
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FAQs
What you need to know about this evolving situation.
Production could rise by 200,000-300,000 b/d within months through basic well workovers if sanctions are lifted. Reaching 2 million b/d would require 1-2 years under favourable conditions, while returning to historical peaks would need substantial long-term investment.
Additional Venezuelan barrels would add to an already oversupplied market, potentially driving Brent crude below the mid-to-high $50/bbl levels projected for Q1 2026. This would benefit consumers but pressure other producers.
Chevron, currently the top non-PDVSA producer, along with Repsol, CNPC and Eni are already operating in Venezuela. Former operators like BP, ConocoPhillips, ExxonMobil and TotalEnergies have prior experience and may consider returning under improved conditions.
Greater Venezuelan exports to US refiners would divert Middle East heavy crude to Asia and increase competition for Canadian barrels on the Gulf Coast. This would widen light/heavy crude pricing differentials, benefitting high-complexity refiners.
Key concerns include political instability, security issues, unclear contract terms, infrastructure degradation and Venezuela's OPEC membership potentially restricting future production growth. Historical precedents like Libya show recovery can take a decade or more.