JP Morgan Analysts Predict US Could Control 30 Percent of World’s Oil as Energy Stocks Surge

Shares across the U.S. energy sector saw significant gains on Monday, following President Donald Trump’s announcement regarding plans to assert control over Venezuela’s oil industry. The move, which would see American companies spearheading revitalization efforts after the capture of President Nicolás Maduro, has prompted analysts to re-evaluate the global energy landscape. While the immediate effect on crude prices may be limited due to current market surpluses, the long-term implications for international energy markets and geopolitical dynamics could be substantial.

The United States has already cemented its position as the world’s largest crude producer, largely thanks to the shale oil revolution. Adding to this domestic strength are significant offshore discoveries near Guyana, predominantly managed by ExxonMobil and Chevron. Should the U.S. gain influence over Venezuela’s industry, which holds the planet’s largest proven oil reserves, the balance of power in global energy markets could fundamentally shift. JP Morgan analysts, in a Monday note, suggested that a consolidated total could position the U.S. as a leading holder of global oil reserves, potentially accounting for approximately 30 percent of the world’s total. Such a development, they contend, would represent a notable alteration in global energy dynamics.

Venezuela’s oil infrastructure currently suffers from extensive disrepair, a consequence of years of neglect and international sanctions. Despite this, some industry experts believe the nation could potentially double or even triple its current output of about 1.1 million barrels per day, returning to historical production levels relatively quickly. Increased U.S. influence over such a significant portion of global reserves could allow for greater control over oil market trends, potentially stabilizing prices and maintaining them within historically lower ranges. This enhanced leverage would not only bolster U.S. energy security but also reshape power dynamics on an international scale.

However, the path to such a scenario is fraught with complexities. Many energy analysts foresee a more protracted and challenging road ahead. Neal Dingmann of William Blair voiced skepticism regarding the immediate influx of U.S. oil companies and billions in investment to fix Venezuelan infrastructure. He cited political and other inherent risks, coupled with currently subdued oil prices, as significant deterrents. Material improvements to Venezuela’s production capacity, he argued, would require substantial time and hundreds of millions of dollars in infrastructure upgrades. Any such investment would also occur within a weakened global energy market, where U.S. crude prices are down 20 percent year-over-year, having not surpassed $70 a barrel since last June or $80 since the summer of 2024. For context, a barrel of oil exceeded $130 in the lead-up to the 2008 U.S. housing crisis.

The factors influencing a potential Venezuelan production resurgence are numerous, according to John Freeman of Raymond James. These include the speed of any governmental transition and the willingness of multinational oil companies to re-engage in the country. Yet, the market reacted with immediate optimism. At the opening bell, energy sector shares broadly climbed, with companies possessing large refinery operations seeing particular strength. Venezuela produces a heavy crude oil essential for diesel fuel, asphalt, and other heavy equipment fuels. The global shortage of diesel, exacerbated by sanctions on Venezuelan and Russian oil and the inability of lighter American crude to easily substitute it, underscores the importance of this specific type of oil.

Major refiners such as Valero, Marathon Petroleum, and Phillips 66 each saw increases between 5 percent and 6 percent at the market’s open. Oilfield service companies, responsible for drilling and maintenance, experienced even sharper gains, with SLB and Halliburton rising between 7 percent and 8 percent. Exploratory companies, including ExxonMobil, Chevron, and ConocoPhillips, also posted gains ranging from 2 percent to 4 percent, reflecting the market’s initial assessment of the potential for a significant shift in global energy control.

Ruth Forbes

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