By Peter Trankner
Most recently, Venezuela’s oil production fell far short of its historic highs.
The disempowerment of dictator Maduro is a turning point for global energy flows. Who are the winners and losers now? What does the reorganization mean for the price of oil? And why does the shock extend to Moscow?
Jan. 3, 2026, could go down in history as a turning point, as the day the tectonic plates of global energy policy shifted. With the U.S. forces access to Venezuela and the arrest of its dictator Maduro is about far more than a political mind; it’s about accessing our planet’s largest oil reserves and fundamental reordering of global energy flows. Who benefits from the comeback of Venezuelan oil - and who are the losers of this possible new era? Venezuela has oil reserves in the order of 303 billion barrels, which is about one-fifth of the world’s total reserves, according to an Opec report. While Venezuela produced a whopping 3.7 million barrels per day in 1970, the industry has shrunk to a shadow of itself through mismanagement and sanctions, which less than a million barrels of daily production.
As Venezuela still accounted for more than seven percent of global oil production in 1970, the share has now fallen below one percent! In the1970s, Venezuela was the richest country in South America. However, due to socialist mismanagement and corruption, it has become one of the poorest countries on the continent. Around 8 million Venezuelans have fled the country, and the poverty rate stands a about 80%.
But the real winners after Maduro’s disempowerment are not sitting in the government palace of Caracas, but on the US Gulf Coast. At the top of the winners is Chevron. The company was the only US multinational to stay in the country , while competitors such as Exxon packed their bags. Chevron’s persistence to remain in the country during the waves of socialist nationalization could now pay off in the long term: Chevron is already sitting at the boreholes and is likely to be the spearhead of US reconstruction.
The biggest loser is China. For Beijing, the change of government in Caracas is a geopolitical and economic disaster. So far, the majority of Venezuela’s oil exports have gone to China, often as a direct repayment of old debts. When a new, US-owned government now directs these flows northward, China’s independent refineries are sitting on dry land.
This shock triggers a chain reaction that can be felt as far as Moscow. If China extracts more oil from Russia, it strengthens Beijing’s bargaining power against the country. V. Putin is not only losing an ally in Latin America, but must prepare to sell his oil to China at even higher discount to fill the gap. This could become a major financial problem for Putin when it comes to financing his war in Ukraine.
According to J.P. Morgan, however, the upside potential for the oil price is limited in the long term, as the world is already floating in oil and Venezuela could throw millions of additional barrels onto the market in the future. But one thing is certain: the flow of oil has changed direction. It no longer flows east, but north, and makes the US strategically more independent of the Middle East’s trouble spots than ever before.