U.S. oil companies’ shares jumped on Monday after President Donald Trump said American firms could gain access to Venezuela’s vast oil reserves following the arrest of President Nicolas Maduro.
Venezuela holds the world’s largest oil reserves, but years of mismanagement, nationalization, and U.S. sanctions have left its industry in decline. Oil output has fallen sharply from past highs, making any policy shift a potential turning point for energy markets and U.S. firms with past exposure to the country.
Chevron and US refiners lead market gains
Shares of Chevron (CVX), the only U.S. oil major still operating in Venezuela under a U.S. waiver, rose 6.5% in premarket trading. Refiners including Marathon Petroleum, Phillips 66, Valero Energy and PBF Energy gained between 4% and 11%.
Trump said he spoke to U.S. oil companies “before and after” the arrest about investing in Venezuela.
“They want to go in so badly,” Trump told reporters aboard Air Force One. He added that oil companies would rebuild infrastructure using private capital, saying the U.S. government would not invest funds.
Despite the stock gains, global oil prices were largely flat, weighed down by ample supplies worldwide.
Heavy Crude Fits U.S. Gulf Coast Refineries
Venezuelan crude is a heavy, high-sulfur oil best suited for diesel and heavy fuels. Analysts say it fits well with U.S. Gulf Coast refineries, which were built to process similar grades.
“This type of crude aligns well with the configuration of U.S. Gulf Coast refineries,” said Ahmad Assiri, research strategist at Pepperstone.
Trump said the embargo on Venezuelan oil exports would remain in place for now.
Arbitration Awards and Asset Recovery in Focus
Analysts say the policy shift could also reopen the door to recovering assets seized by Venezuela in 2007.
According to J.P. Morgan, ConocoPhillips (COP) and Exxon Mobil (XOM) hold large arbitration awards. ConocoPhillips has claims nearing $10 billion, while Exxon’s outstanding damages are estimated at around $2 billion.
Shares of ConocoPhillips rose 5.5%, while Exxon gained 3%.
Oilfield services firms expected to play a role in rebuilding Venezuela’s industry also advanced. Baker Hughes, Halliburton and SLB rose between 6.6% and 9%.
Still, analysts warn that any recovery will take time due to political uncertainty, damaged infrastructure, and years of underinvestment.
Read also: Venezuela welcomes US oil investment as pressure mounts on exports
