Clarity in Credit

Venezuela - What’s Next for the Oil Industry?

Episode Summary

In the latest episode of our “Clarity in Credit” podcast series, Jason Graffam, Senior Vice President, Sector Lead of Global Sovereign Ratings and Chloe Blais, Vice President of European Corporate Ratings, Diversified Industries & Energy, are joined by Andrew O'Conor, Senior Vice President of Energy & Natural Resources Ratings to discuss the impact U.S. involvement in Venezuelan politics on the global oil industry.

Episode Notes

Following the U.S. military’s action in early January 2026 to oust Venezuelan President Nicolás Maduro on the global oil industry, it appears the U.S. government’s objective in Venezuela--among other stated reasons--is to revitalize the country's vast oil resources with the help of and investment by American energy companies. In this episode of “Clarity in Credit”, we discuss the medium-term implications of the U.S. intervention in Venezuela on the country's energy sector, the prospects for greater investment in the country, and the global oil industry.

KEY HIGHLIGHTS

The U.S. military action in Venezuela that toppled Maduro has little immediate impact on the current global balance between crude oil supply and demand and, therefore, on oil prices.
It will likely take several years and large investments to meaningfully resuscitate the Venezuelan oil industry. In addition, the country’s current political stability, its legal framework, and the current low oil price environment are unfavorable conditions for most western companies and do not incentivize the large investments required.
The arrest of Maduro has no immediate credit rating impact on the oil and gas producers that we rate. However, in the unlikely scenario that the oil price significantly declines for six to 12 months because of a severe weakening in the economic environment, most of our rated issuers would be well positioned, financially and operationally, to weather such a downturn.

RELATED RESEARCH

“Maduro's Ouster Unlikely to Have Significant Near-Term Impact on Oil Prices,” https://dbrs.morningstar.com/research/471154
“The Promise and Peril of U.S. Intervention in Venezuela,” https://dbrs.morningstar.com/research/471477
“Venezuela and the Shifting Map of Insurance Risks in the Caribbean,” https://dbrs.morningstar.com/research/471250
“Maduro's Exit: Very Limited Direct Exposures for International Banks With Potential Opportunities in the Long Term,” https://dbrs.morningstar.com/research/471183

Catch up on these topics and more thought leadership from across the Fundamental Ratings teams and around the globe via our monthly Consider Credit newsletter:https://dbrs.morningstar.com/research/471419.

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