Wael’s view
If the US operation in Venezuela tells us anything, it’s that Washington is thinking past the shale boom and back to a more traditional playbook: secure access to oil abroad when supply at home looks less assured.
Start with the numbers. The US Energy Information Administration expects US crude output to dip slightly in 2026, after several years of growth. That’s not a collapse. But it matters politically because shale is a treadmill: production stability depends on constant reinvestment, which in turn depends on price. Top-tier shale sites can work at lower prices, but meaningfully higher prices are required to profitably drill new wells.
Against that backdrop, Venezuela looks like a long-term option the US doesn’t want to leave to rivals. Recent reporting around the crisis frames the push as one where US oil firms are being invited back into a country with the world’s largest stated reserves, but a degraded industry, an opportunity some analysts describe as a “poisoned chalice,” with extra-heavy Venezuelan supply requiring high prices and heavy upfront investment to scale.
That brings us to the uncomfortable inference: This is oil security dressed up as strategy. And it hints at a return to a familiar American pattern — political interference in petrostates — that felt less central in the 2014-2024 period when shale growth and surging exports reduced the urgency of “barrels at any cost.”
Oil has often been the subtext of US foreign policy. The 1953 coup in Iran followed the nationalization of the Anglo-Iranian Oil Company. The point is not that “one company did it,” but that energy interests and state power intertwine when strategic supply appears at stake.
Today, the corporate “face” of the Venezuela file is Chevron, not because it “controls” US policy, but because it sits at the chokepoint. With sanctions and licensing, Chevron has effectively become a valve, a channel through which some Venezuelan crude can still reach the US.
There’s also a quieter, very practical reason Venezuela matters: refinery physics. US shale is mostly light sweet. Venezuela’s flagship exports are often heavy sour. These are not interchangeable. What Venezuela can do, quickly, is redirect heavy barrels back to US Gulf Coast refineries that are built to run them — exactly the kind of trade shift that also happens to reduce China’s access to discounted sanctioned crude. For Washington, that China angle is a bonus argument, not the core driver.
But let’s be clear-eyed about the limits. Venezuela’s oil is hard to produce. Even optimistic investment roadmaps talk in multiyear timelines. So anyone expecting a fast flood of supply is likely to be disappointed. Even the reserve story is not simple. Venezuela may top the charts on paper, but “proved reserves” are an economic classification as much as a geological one.
That’s the deeper point for markets: Supply growth is not just about claimed resources. It’s about prices, production technology, political stability, know-how, and logistics.
If all of this is telling us anything, it’s that higher oil prices in the future may be needed to offset decline dynamics in both shale and extra-heavy oil provinces like Venezuela. Washington may be trying to secure additional future supply to cap price spikes, but that won’t be easy, and it won’t be quick.
Wael Mahdi is an independent commentator specializing in OPEC and Saudi Arabia’s economy, and co-author of OPEC in a Shale Oil World: Where to Next?
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