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US President Donald Trump\u2019s actions to take control over Venezuelan oil resources may pose the biggest challenge to the grip the Organisation of Petroleum Exporting Countries (Opec) currently has on the global oil market, says Nigel Green, CEO of the deVere Group, an international financial advisory firm.<\/p>\n
Green expects Opec to remain a significant player, but says US access to Venezuelan oil may bring \u201ca profound shift in where pricing power sits\u201d.<\/p>\n
Read:
Trump\u2019s Venezuela oil revival plan is a $100bn gamble
US tells Venezuela to cut ties with China, Russia, ABC says
Trump opens new front against China with brazen arrest of Maduro<\/p>\n
\u201cWe laugh all the way,\u201d says Professor Theo Venter of the North-West University Business School.\u00a0Trump is determined to drive oil prices lower in his quest to fulfil an election promise of lower cost of living in the run-up to the US mid-term elections in November \u2013 and the benefit will also reach South African consumers.<\/p>\n
Following the US action in Venezuela on 3 January when it removed then President Nicol\u00e1s Maduro and took him and his wife Cilia Flores to stand trial in the US, Trump has made it clear that his country will take control of Venezuela\u2019s oil reserves.<\/p>\n
Listen: What Trump\u2019s Venezuela takeover means for the world<\/p>\n
Reuters quotes Trump as saying: \u201cOnly time will tell\u201d when it comes to how long the US will oversee Venezuela.<\/p>\n
When asked by the New York Times if it would be three months, six months, a year or longer, Trump replied: \u201cI would say much longer.\u201d<\/p>\n
\u201cWe will rebuild it in a very profitable way,\u201d Trump added. \u201cWe\u2019re going to be using oil, and we\u2019re going to be taking oil. We\u2019re getting oil prices down, and we\u2019re going to be giving money to Venezuela, which they desperately need.\u201d<\/p>\n
US refiners position for market advantage<\/strong><\/p>\n Green says American refiners are seen to be positioning themselves to become the new power brokers in a market long dominated by producer alliances.<\/p>\n Oil traders and US refiners are scrambling to secure Venezuelan supply after reports that the American multinational energy company Chevron is seeking a wider operating licence and Citgo Petroleum, also a US company, could resume purchases of crude.<\/p>\n Read: Oil gains as traders weigh the next steps in Russia-Ukraine war<\/p>\n \u201cUS firms are demanding explicit guarantees from Washington before committing fresh capital, while Chinese oil companies are asking Beijing how to protect their interests,\u201d says Green.<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n \u201cThe message is unmistakable. Control of Venezuelan oil is shifting rapidly from boardrooms to governments.\u201d<\/p>\n<\/blockquote>\n If the Trump administration expands permissions, the impact will be immediate and structural. US Gulf Coast refineries are among the few in the world designed to process Venezuela\u2019s heavy, sour crude efficiently, says Green.<\/p>\n Years of sanctions have kept those barrels sidelined, forcing refiners to rely on alternative heavy grades that are now increasingly scarce.<\/p>\n Geopolitical stakes<\/strong><\/p>\n Sanctions on Iran and Russia have tightened the market further, leaving refiners competing for a shrinking pool of suitable feedstock.<\/p>\n \u201cGuaranteed access to Venezuelan crude would change that overnight,\u201d says Green.<\/p>\n \u201cFor US refiners, it would mean lower input costs, stronger margins, and a strategic advantage competitors cannot easily replicate. For the global market, it would mean a profound shift in where pricing power sits.\u201d<\/p>\n He says Opec has for decades shaped oil markets through coordinated production decisions.<\/p>\n \u201cThis influence remains significant, but it weakens the moment access to supply becomes governed less by cartel policy and more by political authorisation.<\/p>\n \u201cOpec controls barrels. Washington controls licences. When those two forces collide, the balance of power is bound to start to tilt,\u201d he adds.<\/p>\n<\/blockquote>\n \u201cVenezuelan oil now sits at the centre of that collision.\u201d<\/p>\n The country holds the world\u2019s largest proven crude reserves, yet its output remains constrained by sanctions, infrastructure decay, and diplomatic isolation.<\/p>\n \u201cAny move by the US to loosen restrictions would instantly elevate Venezuelan barrels from distressed supply to strategic commodity. Companies allowed to lift that oil gain more than commercial and geopolitical advantage.\u201d<\/p>\n He says this is why Chinese oil firms are seeking guidance from Beijing. \u201cTheir concern is not theoretical. It reflects a recognition that access to Venezuelan energy is becoming a political contest rather than a market transaction.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n \u201cIf Washington determines who can buy, ship, and refine Venezuelan crude, then global energy flows begin to follow diplomatic lines,\u201d says Green.<\/p>\n<\/blockquote>\n \u201cThis doesn\u2019t mean Opec becomes irrelevant. It means its dominance faces a rival force it cannot control.\u201d<\/p>\n Energy power politics<\/strong><\/p>\n For markets, this marks the return of energy power politics in its most modern form.<\/p>\n Green says if US companies like Chevron secures broader permissions and Citgo Petroleum resumes purchases, the shift will be unmistakable.<\/p>\n \u201cUS refiners will move from being price-takers in a cartel-driven system to gatekeepers in a politically governed one.<\/p>\n \u201cOpec will still matter, but it will no longer stand alone at the centre of oil market power.\u00a0This matters for investors globally.\u201d<\/p>\n Venter says Trump\u2019s \u201cdrill baby, drill\u201d approach has turned the international oil market on its head.<\/p>\n<\/blockquote>\n Nevertheless, the US operation in Venezuela and subsequent move to \u201crun the country,\u201d as Trump put it, is not only about oil as such.<\/p>\n Read: US to \u2018run Venezuela\u2019 in interim after Maduro capture, says Trump<\/p>\n \u201cTrump wants a tighter grip on the oil market to neutralise Russia and China. China does not have its own oil resources.\u201d<\/p>\n Venter says Russia filled the gap when Venezuela\u2019s contribution to global production dwindled due to political mismanagement and gaining control over the Venezuelan reserves, can dilute the role of the Russians again.<\/p>\n \u201cAccess to the Venezuelan reserves gives the US an unbelievable grip on the global oil market.\u201d<\/p>\n Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n\n
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