Oil Prices Rise Amidst Venezuela Reconstruction Speculation
On Monday, shares of oil companies saw gains on Wall Street as investors anticipated that energy firms would benefit from the reconstruction of Venezuela’s oil infrastructure.
Key Players and Their Performance
- Chevron: The U.S.-based oil company experienced the most significant increase, with its stock rising by 5.13% to $163.89 per share. Chevron is considered the biggest beneficiary due to its presence in Venezuela, which holds the world’s largest proven oil reserves.
- ConocoPhillips: Its shares went up by 2.59% to $99.20 per share.
- Exxon Mobil: Its stock price climbed 2.24% to $125.39 per share.
- Williams: Its shares increased by 0.51% to $61.6 per share.
- Repsol (Spain): The Spanish company’s stock rose 3.47% to €16.98 per share.
- PetroChina (China), Equinor (Norway), and Petrobras (Brazil): Their shares fell, with PetroChina dropping by 3.27%, Equinor by 1.61%, and Petrobras by 1.67%.
- BP (UK) and TotalEnergies (France): Their stocks also decreased by 0.61% and 0.55%, respectively.
U.S. Leadership in Venezuela and Investment Opportunities
Former U.S. President Donald Trump announced that the United States would temporarily take a leading role in Venezuela to manage the country until a power transition occurs. He also mentioned that major U.S. oil companies are prepared to invest billions in rebuilding Venezuela’s dilapidated oil infrastructure, potentially restarting production—provided they finance most of the investment themselves. However, experts caution that this process would take years and the legality of the plan remains uncertain.
Chevron: The Most Beneficiary
Chevron is poised to be one of the primary beneficiaries, as it has maintained a presence in Venezuela since early 2000s expropriation and currently produces around 20% of Venezuela’s oil under a sanctions exemption, exporting crude to U.S. refineries.
Oil Prices Close Higher Amidst Uncertainty
Oil prices closed higher on Monday, with the market uncertain about whether U.S. companies can immediately exploit Venezuela’s massive crude reserves.
- Brent crude oil for March delivery increased by 1.66% to $61.76.
- West Texas Intermediate (WTI) for February delivery rose by 1.74% to $58.32.
Chevron’s Commitment Amidst Political Risk
Chevron broke its silence regarding the U.S. takeover of Venezuela, stating that it will continue focusing on employee safety and asset integrity while adhering to existing laws. The company currently produces 150,000 barrels per day in Venezuela, accounting for 17% of the nation’s output, thanks to a special license.
ConocoPhillips, which left Venezuela in 2007 along with ExxonMobil, has expressed interest in monitoring the situation closely. Both companies reflect the delicate balance between economic opportunities and political risks.
