This article is republished from The Conversation, an independent and nonprofit source of news, analysis and commentary from academic experts. Amy Myers Jaffe is the Director of New York University's Energy, Climate Justice, and Sustainability Lab, a research professor at Tufts University.
In the wake of U.S. forces鈥� , U.S. President Donald Trump has said the U.S. is .
In addition, the U.S. has blockaded Venezuelan oil exports for a few weeks and that reportedly escaped from the blockade.
To understand what鈥檚 happening and what it means for U.S. consumers and the American energy industry, The Conversation U.S. checked in with , a research professor at New York University and senior fellow at Tufts University who studies global energy markets and the geopolitics of oil.
What is the state of Venezuela鈥檚 oil industry and how did it get to this point?
Venezuela鈥檚 oil industry has over its history, including a steady downward spiral beginning in 1998. That鈥檚 when a worldwide economic downturn took global oil prices below $10 per barrel at the same time as the Venezuelan public鈥檚 growing interest in reasserting local control of the country鈥檚 oil industry ushered in populist President Hugo Ch谩vez.
In April 2002, to protest the appointment of Ch谩vez loyalists to of the national oil company, Petr贸leos de Venezuela. The chaos culminated in an attempted coup against Chavez, who managed to retake power in a matter of days. Petr贸leos de Venezuela鈥檚 workers then went out on strike, prompting Ch谩vez to and oil workers. That began a brain drain that would last for years.
In 2007, Ch谩vez, standing in front of a banner that read 鈥�,鈥� took over ExxonMobil鈥檚 and ConocoPhillips鈥� oil-producing assets in Venezuela. The companies had declined to accept new oil contracts at radically less profitable terms than they had in previous years.
After Ch谩vez鈥檚 death in 2013, national economic chaos accelerated. By 2018, reports began to surface that roving gangs, as well as some oil workers struggling to survive, were 鈥� computers, copper wiring, and metals and machinery 鈥� to sell on the black market.
added to the mix over the years, culminating in a drop in Venezuelan oil production to 840,000 barrels a day in 2025, down from the 3.5 million barrels a day it was able to produce in 1997.
A handful of international oil companies remained in the country throughout the turmoil, including U.S.-based Chevron, French-Indonesian firm Maurel and Prom, Spanish firm Repsol, and Italian firm ENI. But the political chaos, sanctions and technical mismanagement of the oil industry have taken a heavy toll.
Some estimates say that the country wouldn鈥檛 need a lot of investment to by 2027. But other analysts say that immediate could only raise Venezuela鈥檚 production to 1.5 million barrels a day.
Most of the oil in Venezuela is to be able to be refined into usable products. The country鈥檚 .
What effect does Venezuela鈥檚 production have on prices that U.S. consumers pay for gasoline, natural gas, gas-fired electricity and other petroleum products?
In general terms, U.S. gasoline prices are influenced by global crude oil market levels. Sudden changes in export rates from major oil-producing countries can alter the trajectory for oil prices.
However, Venezuela鈥檚 recent export levels have been relatively small. So the immediate effect of changes in Venezuelan oil export levels is likely to be limited. Overall, the at the moment, keeping prices relatively low and in danger of falling further, even though .
Venezuela did not export any natural gas. In the long run, a fuller restoration of Venezuela鈥檚 oil and gas industry could mean oil prices will have difficulty rising as high as past peaks in times of volatility and could potentially fall if oil demand begins to peak. And Royal Dutch Shell and Trinidad and Tobago National Gas Company have plans to develop , adding to an , often called LNG, in global markets in the coming years.
How much oil is coming to the U.S. now, and how would more imports of Venezuelan oil affect U.S. refiners?
The U.S. Gulf Coast refining center is known for its like Venezuela鈥檚 into valuable products such as gasoline and diesel. Already, refineries owned by Chevron, Valero and Phillips 66 are .
Before the U.S. seized Maduro, most of Venezuela鈥檚 exports were going to China, though about 200,000 barrels a day were coming to the United States under Chevron鈥檚 special license.
Trump has said the U.S. will get from Venezuela, to be used 鈥渢o benefit the people鈥� of both countries. That鈥檚 about two or three days鈥� worth of U.S. oil production, and between one and two months鈥� worth of Venezuelan production. What effects could that have for the U.S. or Venezuela?
Some of Venezuelan crude oil is currently piled up in Venezuela鈥檚 storage in the aftermath of the U.S. blockade. Exports needed to resume quickly to prevent oil production facilities from needing to shut down, which could then require lengthy and expensive restart procedures.
The United States has been a major exporter of petroleum products in recent years, .
Processing more Venezuelan oil might help make U.S. Gulf Coast refineries a bit more profitable by making more money on their refined products exports. But since there was no shortage of products in the U.S. market, I don鈥檛 expect consumers to see much savings.
But U.S. refineries to refine heavy oil like Venezuela鈥檚. And they have from other suppliers. So they won鈥檛 be able to handle all of those 30 million to 50 million barrels. Some of it will either have to be sold abroad or put in the .
How does a potential increase in Venezuelan oil production affect U.S. domestic oil producers?
Over time, the impact of the restoration of Venezuelan oil production on oil prices is hard to predict. That鈥檚 because it will likely take a decade or more before Venezuela鈥檚 oil production levels could be fully restored. Long-term oil prices are notoriously tricky to forecast.
Generally speaking, U.S. shale production rates and profitability benefit when oil prices are above $50 a barrel, as they have been since 2021. U.S. oil production rose to , . Forecasts suggest a as well, if oil prices stay relatively flat.
Longer term, all bets are off, since the Organization of the Petroleum Exporting Countries, or OPEC 鈥� a group of countries that coordinate global petroleum production and sales 鈥� has a history of when they add new oil fields, which sometimes leads to so much disagreement that a price war erupts.
The last time Venezuela moved to increase its production significantly, in the 1990s, oil prices sank below $10 a barrel. Major OPEC members like the United Arab Emirates have been expanding capacity in recent years, and others with large reserves like Libya and Iraq aspire to do the same in the coming decade as well. The UAE has been asking the group for permission to increase its production, causing difficulties in the group鈥檚 efforts to agree on what their total production and target oil price should be. That could be good news for consumers, if OPEC disunity leads to higher supplies and falling prices.
Some commentators have suggested China could be the biggest loser if shipments of Venezuelan oil shift West and away from discounted sales to China. How does the current situation affect China鈥檚 energy security and geostrategic considerations?
China鈥檚 oil imports have been averaging , with about 500,000 to 600,000 of that coming from Venezuela. Iran and Russia are among China鈥檚 largest oil suppliers, and both countries鈥� industries face tightening U.S. sanctions. There is enough oil available on the global market to provide China with what it wants, even if it doesn鈥檛 come from Venezuela.
The real question is about China鈥檚 overall response to the U.S. intervention in Venezuela. Beijing鈥檚 initial reaction to Maduro鈥檚 removal was fairly muted. In a Dec. 31, 2025, speech, however, China鈥檚 President Xi Jinping said China鈥檚 defense capabilities and national strength had 鈥渞eached new heights鈥� and called for the 鈥渞eunification of our motherland.鈥� In light of the U.S. intervention in the Americas, China may see a justification to move toward Taiwan.
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