Oil stocks sharply higher Monday after President Donald Trump announced plans to take control of Venezuela’s oil industry, according to The Associated Press. The AP reported Trump said American companies would be helping to revitalize the sector after the capture of President Nicolás Maduro.
The announcement pushed expectations for how the oil market could be affected, even though analysts said the near-term effect on crude prices was unlikely to be immediate because of the glut in the market. AP reported that while crude-price impacts may be limited at first, the move could still upend energy markets and affect the geopolitical landscape.
The AP also highlighted how Venezuela’s heavy crude matters for global refining. Venezuela produces heavy crude that is needed for diesel fuel, asphalt and other fuels for heavy equipment, the AP reported, adding that diesel is in short supply around the world because of sanctions on oil from Venezuela and Russia and because America’s lighter crude oil cannot easily replace it.
In a research view shared with AP, analysts at JP Morgan wrote that U.S. control could shift international leverage. AP reported JP Morgan analysts said the combined picture could “reshape the balance of power in international energy markets,” and that the combined total could position the U.S. to account for about 30% of the world’s oil reserves if the figures were consolidated under U.S. influence. JP Morgan also wrote that such a shift would mark “a notable shift in global energy dynamics,” according to AP.
The AP said the expectation of greater influence also came with an argument about stabilization. AP reported JP Morgan wrote that with greater access to and influence over a substantial portion of global reserves, the U.S. could exert more control over oil market trends, potentially helping stabilize prices within historically lower ranges. JP Morgan wrote that the increased leverage would enhance U.S. energy security and could reshape the balance of power in international energy markets, AP reported.
Still, other analysts cited by AP said any operational change for Venezuela would take longer than the market reaction implied. AP reported that Venezuela’s oil industry has been in disrepair after years of neglect and international sanctions, while some oil-industry analysts believe Venezuela could double or triple production from about 1.1 million barrels of oil a day and return to historic output levels relatively quickly.
AP also reported a longer timeline outlook from Neal Dingmann of William Blair, who wrote that while the Trump administration has suggested large U.S. oil companies would enter Venezuela and spend billions to fix infrastructure, political and other risks, along with relatively low oil prices, could prevent that from happening anytime soon. AP reported Dingmann said material change would require time and millions of dollars in infrastructure improvement.
AP placed the caution in the context of current crude prices in the United States. The AP reported that crude prices in the U.S. were down 20% compared with last year, that benchmark U.S. crude had not been above $70 since June, and had not touched $80 per barrel since the summer of 2024. AP also noted that a barrel of oil cost more than $130 in the leadup to the 2008 U.S. housing crisis.
At the opening bell, the AP said the market move was broad across the sector, particularly among refiners and oilfield services. Big refiners including Valero, Marathon Petroleum and Phillips 66 rose between 5% and 6%, the AP reported, while oilfield service companies SLB and Halliburton rose between 7% and 8%. Major oil explorers including ExxonMobil, Chevron and ConocoPhillips rose between 2% and 4%, AP reported.
AP also reported that John Freeman of Raymond James said several factors could affect any path back for Venezuelan production, including how quickly a government transition can take hold and how fast and willing multinational oil companies are to reenter the country.