Trump’s strategy regarding Venezuela may weaken OPEC’s influence over global oil markets

Shifting Power in Global Oil Markets

Over the past year, a surge in oil output from the Americas—particularly the United States, Guyana, and Brazil—has posed significant challenges for OPEC as it tries to stabilize the market and boost prices.

OPEC’s ability to steer global oil supply and pricing may face further setbacks due to U.S. involvement in Venezuela and former President Donald Trump’s ambitions to assert control over the oil sector in the nation with the world’s largest crude reserves.

Venezuela, an OPEC member, is believed to possess 303 billion barrels of crude oil, surpassing the reserves of other major OPEC nations such as Saudi Arabia, Iraq, Iran, and the UAE.

If the U.S. were to gain influence over Venezuelan oil assets and American companies invested in reviving the country’s struggling energy sector, the balance of power in the global oil market could shift dramatically in favor of the United States, diminishing OPEC’s sway, according to industry experts.

Revitalizing Venezuela’s oil production—which currently accounts for less than 1% of daily global demand—would require massive financial commitments, likely exceeding $100 billion, and would take years to materialize. This would also depend on the establishment of robust legal protections and security measures to reassure investors wary of past expropriations and nationalizations.

Despite President Trump’s proposal for U.S. companies to help restore Venezuela’s oil sector, top American oil executives expressed little enthusiasm during a recent White House meeting.

Although Trump promoted Venezuelan oil as a source of “tremendous wealth” for both the industry and the American public, industry leaders responded with caution.

Exxon CEO Darren Woods remarked to President Trump, “We’ve had our assets seized there twice, so returning would require significant changes from what we’ve experienced historically.”

He added, “Given the current legal and commercial environment in Venezuela, investing there is not feasible.”

Regardless of Venezuela’s future investment climate, if the U.S. were to control its oil industry, it would alter the dynamics of the global oil market, granting the U.S. greater influence over long-term supply. This could reduce the ability of OPEC and its allies, including Russia and Kazakhstan, to manage market balances and pricing.

Potential Consequences of U.S. Influence

According to JPMorgan analysts cited by The Wall Street Journal, this shift could give the U.S. more leverage in oil markets, potentially keeping prices lower for longer, strengthening energy security, and transforming the global energy landscape.

President Trump’s target of $50 per barrel oil, a goal since he took office, would negatively impact the revenues and investment plans of major OPEC producers, including Saudi Arabia.

Saudi Arabia, the world’s largest oil exporter, reportedly believes that any meaningful recovery in Venezuela’s oil sector will take years and require substantial investment.

Other Gulf nations anticipate that reduced Venezuelan exports to China could boost the share of Middle Eastern oil in Chinese imports.

The evolving global landscape, with the U.S. seeking control over another nation’s oil resources, is disrupting the market and creating new obstacles for OPEC and its partners.

President Trump aims to increase Venezuelan oil flows to further drive down energy prices.

Persistently low oil prices would strain the finances of all OPEC+ members, limiting their ability to manage supply and pricing, especially under unpredictable U.S. leadership. OPEC+ must now consider this new variable in its production strategies and determine how much it can raise prices without provoking a backlash from the U.S.

By Tsvetana Paraskova for Oilprice.com

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