Chevron confirmed a major expansion of its operations in Venezuela this week, signing an agreement to invest more than $7 billion over five years in the Orinoco Belt, with the goal of more than doubling its current production to roughly 600,000 barrels per day. The deal, announced after President Trump described an ambitious partnership to develop Venezuela’s oil reserves, raises complex questions for Gulf producers watching global supply dynamics shift.

Venezuela holds the world’s largest proven oil reserves at over 303 billion barrels, surpassing Saudi Arabia’s 267 billion, according to OPEC’s 2025 Annual Statistical Bulletin. However, years of sanctions, nationalization, and infrastructure decay have left daily production at just over one million barrels, a fraction of what Gulf states produce collectively.

For the UAE and its Gulf neighbors, the Chevron deal signals potential long-term competition in global oil markets. The agreement grants Chevron additional acreage in the Orinoco Belt and includes what the White House described as a Pentagon stake in oil profits. Energy Secretary Chris Wright said the deal aims to increase private-sector confidence for businesses operating in Venezuela.

However, energy analysts caution that reviving Venezuela’s oil industry will take years. Amy Jaffe, director of the Global Energy, Climate, and Sustainability Lab at NYU, estimated it could take 2 to 4 years to bring new greenfield facilities online. Exxon Mobil CEO Darren Woods called Venezuela ‘uninvestable’ in January, and the company has reportedly not changed its stance.

The deal also faces questions about its legality. Venezuela’s constitution requires National Assembly approval for such arrangements, which has not occurred. Ian Vásquez of the Cato Institute noted that the agreement was reached with what he described as a dictatorship, potentially undermining future confidence.

For UAE-based energy traders and Gulf state planners, the Venezuela deal adds another layer of uncertainty to an already volatile market shaped by the ongoing Iran conflict and its impact on energy supplies. National average gasoline prices in the US have already jumped to $4.12 per gallon, up 93 cents from the same point last year, according to AAA.

Source: NY Post