Key Takeaways
- Venezuela is projected to add several hundred thousand barrels per day (bpd) of oil production by the end of 2026, following a 30% to 40% growth forecast from current levels of 1 million bpd.
- US Energy Secretary Chris Wright remains "not yet satisfied" with reforms at the International Energy Agency (IEA), despite the agency reintroducing more conservative modeling scenarios.
- Major energy firms including Chevron (CVX), Shell (SHEL), and BP (BP) have received expanded licenses to operate in the Orinoco Belt as the US effectively ends its decade-long embargo.
- The US government plans to control Venezuelan oil sales and revenue, with Secretary Wright estimating that exports could generate $5 billion in revenue within the coming months to fund the country's interim administration.
US Energy Secretary Chris Wright announced on Tuesday that the United States expects a significant surge in Venezuelan crude output, projecting that the South American nation could add several hundred thousand barrels per day (bpd) to global markets by the end of 2026. Speaking during a high-profile visit to the Orinoco Belt, Wright characterized the shift as a "pivot in history" for the region's energy sector.
The production boost is expected to be driven by a 30% to 40% increase in activity from existing and new joint ventures. Chevron (CVX), currently the most prominent American operator in the country, is reportedly on target to double production at its Petropiar facility within the next 12 to 18 months. Market analysts suggest that such a rapid expansion could place significant downward pressure on global benchmarks like Brent and WTI.
In addition to the Venezuelan forecast, Secretary Wright delivered a stern critique of the International Energy Agency (IEA), stating that the US is "not yet satisfied" with the pace of changes at the Paris-based organization. The friction stems from the Trump administration's demand that the IEA return to "fact-based" forecasting rather than what Wright describes as "politicized" advocacy for green energy transitions.
While the IEA recently reintroduced its "Current Policies Scenario" (CPS) to reflect existing energy pathways more accurately, Wright indicated that the agency has not gone far enough to prioritize global energy security. The US, which provides approximately 18% of the IEA’s budget, has previously threatened to withdraw funding or exit the agency entirely if its modeling remains "unrealistically green."
The Treasury Department has already issued new general licenses allowing global majors such as Shell (SHEL), BP (BP), Eni (E), and Repsol (REPYY) to re-engage with the Venezuelan state oil firm PDVSA. Wright emphasized that the majority of this new production will flow to US refineries in Florida, helping to lower domestic prices for gasoline, diesel, and jet fuel.
Under the current US strategy, Washington will oversee oil sales and control the resulting revenue, depositing funds into US-controlled accounts to ensure they are used for humanitarian and infrastructure purposes. This "leverage-based" approach aims to stabilize the Venezuelan economy while simultaneously securing a massive new source of heavy crude for the American market.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.