Background on Key Players
On this Wednesday, stocks of oil companies experienced a significant downfall following U.S. President Donald Trump’s announcement that interim Venezuelan authorities would supply up to 50 million barrels of sanctioned crude oil to the United States. This news raised concerns about an increase in global oil supply.
Stock Market Performance
In Wall Street, shares of oil companies faced substantial declines:
- ConocoPhillips dropped by 3.24% to $93.96 per share.
- ExxonMobil experienced a 2.12% decrease to $118.49 per share.
- Enbridge, a crude oil transporter and distributor, fell by 1.03% to $45.23 per share.
- Chevron saw a 0.86% decline to $155.20 per share.
In China, PetroChina, the largest oil and gas company, suffered the most significant drop of 3.60%.
British companies Shell and BP also showed erratic performance, with 3.73% and 3.16% declines respectively. Norwegian Equinor decreased by 3.05%, while French Totalenergies retreated by 2.78%.
Spanish Repsol’s stocks fell 2.28%, and Brazilian Petrobras experienced a slight increase of 0.10%.
Trump’s Announcement and Market Reaction
President Trump declared that Venezuela would export between 30 and 50 million barrels of sanctioned crude, to be sold at market prices. He stated that he would control this revenue “to ensure it benefits the people of Venezuela and the United States.”
Analysts from Scotiabank and Monex explained that Trump’s announcement aims to strengthen U.S. economic influence over Venezuela and reduce its ties with China, Russia, Iran, and Cuba.
Felipe Mendoza, CEO of IMB Capital Quants, confirmed that negotiations are underway between the U.S. government, the oil industry, and shipping sources to resume Venezuelan crude exports to the U.S.
CEOs of major oil companies are expected to visit the White House on Thursday to discuss the future of Venezuela’s oil sector, while shipping data indicates that Venezuelan terminals have not delivered crude for exportation, except to Chevron, over the past five days.
The Brent crude futures fell by 74 cents, or 1.22%, to $59.96 per barrel, while the West Texas Intermediate in the U.S. dropped 1.14 dollars, or 2%, to $55.99 per barrel on Wednesday.
Venezuelan Stock Market Surges
The Venezuelan stock market, the Bolsa de Valores de Caracas (BVC), has shown a positive response following Nicolás Maduro’s detention over the weekend, marking its highest increase since operations began.
The BVC’s primary index, the Índice Bursátil Caracas (IBC), increased by 57.7% to a level of 4,458.84 points on Wednesday.
Since the U.S. operation in Venezuela, which led to Maduro’s arrest on Saturday at the start of the year, the IBC has seen a 71.65% rise.
Year-to-date, the market has already accumulated a return of 114.13%.
The market reaction came after the U.S. executed a military operation early Saturday and confirmed Maduro’s arrest, who had been accused of drug trafficking charges during Donald Trump’s first administration.
According to information from the stock exchange center, the Financial Index ended the day at 9,481 points, with an absolute variation of 1,264.15 points (an increase of 15.38%), and the Industrial Index closed at 1,005.14 points (a rise of 7.24%).
At the end of the session, 18 stocks increased in price, three decreased, and nine remained stable in the local market.
Valmex Casa de Bolsa’s analysis team noted that Maduro’s arrest triggered the U.S. energy sector, anticipating major oil companies’ return to the country with vast estimated oil reserves and rapid redirection of Venezuela’s heavy crude to the Gulf Coast. However, this optimism was challenged by complex operational realities and geopolitical shifts under President Trump’s supervision.
The stocks that rose the most were Banco Provisional’s, with a 143% increase, followed by Ron Santa Teresa, a local rum producer, which climbed 109.6%.
