2026 Oil Market Will Not Be About Venezuela

The oil market in 2026 will not be about Venezuela but about OPEC+ cutting or not.

That’s what Skandinaviska Enskilda Banken AB (SEB) Chief Commodities Analyst Bjarne Schieldrop stated in an oil market report sent to Rigzone by the SEB team on Monday.

“The global oil market in 2026 will not be about Venezuela,” Schieldrop said.

“It will be about OPEC+ balancing act between oil price and market share. Making cuts or not,” he added.

“The IEA [International Energy Agency] projected in December that the world will only need 25.6 million barrels per day from OPEC in 2026 versus a production in November of 29.1 million barrels per day. If the IEA is correct then … OPEC will need to cut production by 3.5 million barrels per day to keep the oil market balanced,” he continued.

“OPEC+ confirmed this weekend that it will keep production unchanged in Q1-26. The consequence is that the oil price is heading lower by the week. We expect OPEC+ to shift from ‘hold’ to ‘cut’ as Brent crude moves to the low $50ies,” Schieldrop went on to state.

A statement posted on OPEC’s website on January 4 revealed that, in a meeting held on Sunday, Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman “reaffirmed their decision on 2 November 2025 to pause production increments in February and March 2026 due to seasonality”. 

In the SEB report, Schieldrop highlighted that Venezuela is not a big oil producer today, noting that the country produced 960,000 barrels per day in November.

“At the same time, it consumes some 400,000 barrels per day with net to the world exports of only 560,000 barrels per day. Supply risk to the global oil market is thus very limited as it stands today,” he said.

Schieldrop pointed out in the report that Venezuela produced closer to 2.4 million barrels per day in 2015 but said “years of corruption, plus U.S. sanctions, has eroded production capacity”.

“Its oil infrastructure is worn down. Engineers who could get jobs in other countries have left,” he added.

Schieldrop went on to state that “what makes everyone lift their eyebrows over Venezuela with respect to oil is that it has the world’s largest oil reserves”.

“The idea is that U.S. capital coupled with Venezuelan oil reserves could lead to a major upturn in oil production. But it will require billions and billions of dollars and also time to drive production higher,” he said.

“China has poured billions into infrastructure in Venezuela with most of it lost due to corruption. … It may not be all that safe for U.S. oil majors to pour billions in capex into Venezuela,” he continued.

“Impressions from latest headlines is that U.S. money is already knocking on the door in Venezuela, but it is too early to say whether such a dollar-flow will really materialize in the end or not,” he noted.

In a statement sent to Rigzone by the Sparta Commodities team on Monday, Hoa Nguyen, who leads the development of Sparta’s forward-looking tools for fuel oil and feedstocks, highlighted that “there’s a huge difference between probable vs recoverable reserves, the latter of which also massively depends on prices”.

“Venz grades are some of the heaviest crudes that exist in significant… quantities in the world. And you need some 10-15 percent diluents to even get it out in pipelines,” Nguyen said.

“The cost of taking whatever is fairly accessible is already high. The cost of accessing the less recoverable stuff? Astronomical,” Nguyen added.

“If I were an American major, I would find it very hard to justify, on purely economic grounds, drilling more when flat price is a very exciting $60 a barrel,” Ngyuen continued.

“That’s not even counting the billions that will be needed to revamp the existing decrepit infrastructure to produce, store, and transport it,” the Sparta Commodities representative went on to state.

In the report, Ngyuen noted that “it will be a long road before they [Venezuela] will hit three million barrels per day again, if ever”.

“Having said that, from a technical standpoint, ramping up to 1.5 million barrels per day seems quite possible to do in just a year or so, and at fairly reasonable costs. And that’s why it’s important to account for the scenario of 500,000 barrels per day extra appearing by the end of Q4,” Ngyuen said.

Rigzone contacted the Consular Section of Venezuela in the United Kingdom and Ireland, the White House, and the American Petroleum Institute (API) for comment on Schieldrop and Ngyuen’s statements. Rigzone has also contacted the International Press Center of China’s Ministry of Foreign Affairs and OPEC for comment on Schieldrop’s statements.

In response, White House Spokeswoman Taylor Rogers told Rigzone, “all of our oil companies are ready and willing to make big investments in Venezuela that will rebuild their oil infrastructure, which was destroyed by the illegitimate Maduro regime”.

“American oil companies will do an incredible job for the people of Venezuela and will represent the United States well,” Rogers added.

Rigzone understands U.S. Energy Secretary Chris Wright, alongside U.S. Secretary of State Marco Rubio, will be leading this effort on behalf of U.S. President Donald Trump. Rigzone also understands correspondence with the companies has already begun.

At the time of writing, the Consular Section of Venezuela in the United Kingdom and Ireland, the API, the International Press Center of China’s Ministry of Foreign Affairs, and OPEC have not responded to Rigzone.

Rigzone has also contacted the API and the Consular Section of Venezuela in the United Kingdom and Ireland for comment on Rogers’ statement. At the time of writing, neither have responded to this Rigzone request for comment either.

A page on Venezuela on the U.S. Energy Information Administration’s (EIA) website, which was last updated in February 2024, stated that Venezuela had the world’s largest proven crude oil reserves in 2023, “with approximately 303 billion barrels”. The page noted that this accounted for approximately 17 percent of global reserves.

“Despite the sizeable reserves, Venezuela produced 0.8 percent of total global crude oil in 2023,” the EIA page highlighted.

To contact the author, email andreas.exarheas@rigzone.com