US Military Operation Unlocks Venezuela Oil Windfall, Gas Prices Plummet
US Energy Secretary Chris Wright revealed that the 30-minute military operation to remove Nicolás Maduro from power has helped clear the way for a significant expansion of Venezuela's energy sector. According to Wright, Chevron is expected to more than double its energy production in Venezuela by the end of 2027, with national energy production projected to increase by over 100%.
The US military operation on January 3rd captured Maduro and his wife, opening the door for increased oil production as the administration takes a more active role in the country. Wright noted that the US has leverage over the Venezuelan government, despite its imperfections, and is working to shift the center of global energy production towards the Western Hemisphere.
Venezuela controls an estimated 300 billion barrels of crude reserves, roughly 20% of the world's total. The increased oil production would be processed through US refineries and produced using American rigs and infrastructure, creating thousands of American jobs. Wright also mentioned that the deal is particularly important given the ongoing conflict with Iran, which disrupts oil shipments through the Strait of Hormuz.
The average US price for regular gasoline rose to about $4.22 a gallon on Wednesday, up from roughly $3.19 a year earlier. Wright said that the administration's emerging approach to Venezuela could use US leverage with energy investment to prompt political change and solve the 47-year conflict with Iran.