US oil companies gain after Trump signals access to Venezuela reserves (updated)

PBF Energy

05/01/2026 11:56

Updates with planned meeting between Trump administration and oil companies in 3rd and 4th paragraphs

Trump administration plans to meet with oil companies this week

Venezuela has world's largest reserves

Production fell after nationalization, sanctions

By Arunima Kumar

Jan 5 (Reuters) - U.S. oil companies' shares closed higher on Monday, on investor optimism about potential access to Venezuela's vast oil reserves after President Donald Trump said the United States would take control of the South American nation following the arrest of its president Nicolas Maduro.

Venezuela holds the world's largest oil reserves, but production plummeted in recent decades due to mismanagement, limited foreign investment following the nationalization of its oil industry and sanctions.

The Trump administration plans to meet with executives from U.S. oil companies later this week to discuss boosting Venezuelan oil production, according to a source familiar with the matter.

The meetings are crucial to the administration's hopes of getting top U.S. oil companies back into the South American nation after its government, nearly two decades ago, took control of U.S.-led energy operations there.

The Trump administration has told U.S. oil executives in recent weeks that they would need to return to Venezuela quickly and invest significant capital in the country to revive the damaged oil industry if they wanted compensation for assets expropriated by Venezuela two decades ago, Reuters previously reported.

Shares of Chevron CVX.N, the only U.S. major currently operating in Venezuela's oil fields, ended 5% higher.

Meanwhile, U.S. refiners Marathon Petroleum MPC.N, Phillips 66 PSX.N, PBF Energy PBF.N and Valero Energy VLO.N were up between 3.4% and 9.3%.

Oil prices settled up $1 a barrel, with analysts noting that in a global market with plentiful supply, any further disruption to Venezuela's exports would have little immediate impact on prices. O/R

Trump has said that the embargo on all Venezuelan oil exports would stay fully in effect for now.

Venezuelan crude is a heavy sour with high sulfur content, making it suitable for producing diesel and heavier fuels, albeit at lower margins compared with other grades, particularly those from the Middle East.

"This type of crude aligns well with the configuration of U.S. Gulf Coast refineries which were historically designed to process such grades," said Ahmad Assiri, research strategist at Pepperstone.

Chevron's existing presence in Venezuela under a U.S. waiver has positioned it as a potential early beneficiary of any policy shift, while refiners stand to gain from increased availability of heavy crude closer to home.

RETURN OF ASSETS

The U.S. action could also pave the way for the return of assets seized by Venezuela in 2007 under late leader Hugo Chavez, analysts at J.P. Morgan said.

They said ConocoPhillips COP.N and Exxon Mobil XOM.N have significant arbitration awards pending, which have a higher chance of recovery.

"In total, ConocoPhillips has outstanding claims approaching $10 billion, while Exxon's outstanding damages appear to be in the $2 billion range against their original claims that exceeded $15 billion," the analysts said.

Shares reflected the optimism, with Exxon Mobil XOM.N and ConocoPhillips COP.N adding more than 2% each.

Shares of oilfield services firms, whose technology would be crucial to boosting Venezuela's crude production, also climbed. Baker Hughes BKR.O, Halliburton HAL.N and SLB SLB.N rose between 4% and 9%.

Still, analysts cautioned that any meaningful recovery would likely take time, given political uncertainty, infrastructure decay and years of underinvestment.

Venezuela was producing as much as 3.5 million barrels per day (bpd) in the 1970s, accounting for more than 7% of global output.

Production slid below 2 million bpd in the 2010s and averaged about 1.1 million bpd last year, or roughly 1% of global supply.

(Reporting by Arunima Kumar and Vallari Srivastava in Bengaluru and Jarrrett Renshaw in Philadelphia; Additional reporting by Gertrude Chavez-Dreyfuss in New York and Pooja Menon; Editing by Maju Samuel, Sriraj Kalluvila and Chizu Nomiyama)

((Arunima.Kumar@thomsonreuters.com;))