Some events capture the world’s attention in ways that blur the line between fact and exaggeration. In many cases, misinformation spreads rapidly—particularly through social media—and is compounded by misleading statements from senior officials, including heads of state and ministers.

This is precisely what followed the abduction of Venezuelan President Nicolás Maduro by US forces in the first week of the year, and subsequent statements by the administration of President Donald Trump that the US government would manage Venezuela’s oil wealth—from investment and refining to marketing—and deploy the revenues as it sees fit.

IMPLICATIONS FOR THE OIL MARKET AND OPEC

Amid the flood of exaggerated—and in some cases entirely false—claims, a central question arises: what does this actually mean for the global oil market and for Opec?

The short answer is that Venezuelan oil will have no material impact whatsoever in the short term (one to three years) on the global energy markets, oil prices or Opec policy.

In the medium term (three to six years), Venezuelan production could, at best, recover gradually to around 3.5mn b/d, roughly the level seen twenty-five years ago. Even then, such volumes would be absorbed by the global oil market, just as it previously absorbed returning supply from Kuwait, Iraq, Russia, the United States, and others. This is particularly feasible given continued global oil demand growth, estimated at around 1.5mn b/d annually in the years and decades ahead.

As for Opec and Opec+, any impact would be limited. Any increase in Venezuelan production would occur gradually and in parallel with rising global demand. In periods of political, economic, or operational instability, Opec has historically granted special exemptions—as it has done for Libya, Iran, and Iraq at various times. It is difficult to imagine a future Venezuelan government choosing not to cooperate with Opec, as market instability would harm Venezuela more than most producers. The experience of the late 1990s—when market collapse coincided with political collapse in Venezuela—remains a powerful lesson.

MYTHS AND POLITICAL OVERSTATEMENT

Among the more curious claims lacking any factual basis was a statement by Venezuelan opposition figure María Machado, a Nobel laureate, suggesting that the US and the West would no longer need Saudi or Gulf oil, as Venezuela could fully replace it. Similarly, one European head of state asserted that these developments—and a presumed surge in Venezuelan output—would soon drive oil prices lower to the benefit of domestic consumers. Others went so far as to claim that global oil markets would be flooded with Venezuelan crude.

These assertions collapse under even the slightest scrutiny.

VENEZUELA’S HISTORICAL OIL SECTOR ROLE

There is no doubt that Venezuela has been one of the world’s most important oil producers and exporters over the past century—and it could be again if political stability, sound governance, and adequate investment are achieved.

Oil production began in 1922, and by 1935 Venezuela was the world’s largest oil exporter. It remained a major market player for decades, even as other producers—such as Iran, Iraq, and Saudi Arabia—rose in prominence. Venezuela was also one of the founding members of Opec in 1960 and nationalized its oil industry in 1976.

POLICY SHIFTS AND INDUSTRY COLLAPSE

During the 1990s and beyond, Venezuela’s oil policy underwent major fluctuations driven by domestic political shifts. One camp, led by PDVSA head Luis Giusti, favored opening the sector to foreign investment, rapidly expanding production, and paying little heed to price risks or Opec commitments—some even argued for leaving Opec altogether.

The opposing camp, led by Hugo Chávez and Ali Rodríguez (later oil minister), held the opposite view.

Giusti’s policies—especially following the 1997 Opec meeting in Jakarta—contributed to the oil price collapse two years later. That collapse played a role in the fall of the right-leaning government and the election of Hugo Chávez in 1999. Resistance to Chávez culminated in the 2002 general strike, which included PDVSA. The government’s response was forceful: production was halted, the company collapsed, and its most experienced engineers were dismissed or left the country – the lost expertise has proven extremely difficult to replace.

HUMAN CAPITAL ANDINFRASTRUCTURE CONSTRAINTS

Human capital is the backbone of the oil industry, and rebuilding it takes decades. Saudi Arabia, for example, invested many years in developing national petroleum engineering expertise. While foreign expertise can sometimes substitute, it is neither easily available nor cheap.

Infrastructure presents another major constraint—from geological surveys and drilling to processing plants, pipelines, and export terminals. These systems take years to build or rehabilitate properly.

INVESTMENT REALITIES AND OIL QUALITY

Investment in Venezuelan oil faces two critical challenges. The first is political and legal stability—essential for investor confidence when billions of dollars are at stake. Under current conditions, this remains uncertain and it may take several years before the country becomes an attractive prospect.

The second, and more fundamental issue, is oil quality. While Venezuela is often cited as holding the world’s largest oil reserves, most of it is extra-heavy, viscous crude that requires costly upgrading. For decades, such material was not even classified as oil under definitions used by the American Petroleum Institute and international bodies like Opec, and was used mainly for power generation—closer to coal than conventional crude. Extracting this crude could cost tens of dollars more per barrel than for other, lighter grades.

This reality sharply limits Venezuela’s near-term impact on global oil markets.

A sober assessment—grounded in history, geology, infrastructure, and market dynamics—shows that many recent claims about Venezuelan oil are exaggerated or false. While Venezuela could one day re-emerge as a major producer, this would require sustained political stability, massive investment, and time. Until then, neither global oil markets nor Opec face meaningful disruption.

* Dr Ibrahim al-Muhanna was a key energy advisor to four Saudi oil ministers and is the author of  ‘Oil Leaders’. He now serves as Vice Chairman of the Saudi Association for Energy Economics.