Chevron and Shell Near Major Oil Production Deals in Venezuela After U.S. Crackdown on Maduro

Chevron (XOM) and Royal Dutch Shell (CVX) are approaching a pivotal moment in global energy markets, with sources confirming that both companies are finalizing production-sharing agreements in Venezuela’s Orinoco Belt—a region containing over 300 billion barrels of proven heavy crude reserves. The deals mark the first major foreign investment in Venezuela’s oil sector since U.S. sanctions were enforced in early 2024 following the removal of President Nicolás Maduro from power, paving the way for a significant revival of upstream activity. The proposed deals would grant both firms access to two key fields in the eastern Orinoco Basin, with Chevron slated to manage the larger of the two, estimated at 320,000 barrels per day (bpd) in initial production. Shell would operate a secondary field with a projected output of 180,000 bpd. Combined, the projects could add nearly 500,000 bpd to global supply within three years of full operation, representing a 1.5% increase in global crude output. The influx of foreign capital and technology is expected to boost Venezuela’s oil production from current levels of around 1.8 million bpd to over 2.3 million bpd by 2029. This surge could exert downward pressure on global crude prices, with Brent crude (CL=F) potentially falling by 5–7% in the medium term, according to independent energy analysts. The market impact would extend to energy equities, particularly U.S. majors with exposure to Latin American assets, and could influence volatility indices such as the CBOE Volatility Index (^VIX), which may decline if geopolitical risk diminishes. The development signals a broader reconfiguration of global energy supply chains as Western oil companies re-enter markets once deemed too risky. The deals also reflect a strategic shift by the U.S. government to leverage sanctions enforcement as a tool for reshaping energy alliances, with Venezuela’s oil now viewed as a potential buffer against supply shocks from the Middle East and Russia.