18 months. The Energy Report 01/07/2026

President Trump is signaling to the world that he believes the landscape of Venezuelan oil production could look dramatically different in just 18 months and when the President talk oil based on his track record the naysayers better listen. Despite pessimistic assessments by some analysts and firms regarding the return of Venezuelan oil production, the reality is that we could see some increases in oil production in the short term and even more substantial increases and   investment in the long term.  Even with that pronouncement, President Trump also wants to remind us that there are other ways to influence the oil market
Trump On Truth Social  caused oil to make a quick dollar a barrel  drop after he posted that  “I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America, ”This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!”
Selling up to 50 million barrels of Venezuelan oil at $55 per barrel could yield between $1.65 billion and $2.75 billion, if the U.S. finds a buyer at market prices. Yet as I mentioned before that China the biggest buyer of Venezuelan crude is looking at alternatives. Reports are saying that instead of buying Venezuelan sanction oil they are going to prefer to buy Iranian sanctioned oil I guess they have a certain affinity for oil that is tainted with sanctions it must make life more interesting in China.
But now, oil is catching a bid thanks to a Wall Street Journal report that Russia has sent naval escorts to accompany an empty oil tanker—once known as the Bella 1, now renamed the Marinera—which the U.S. Coast Guard has been shadowing. The twist? The tanker, previously stateless and flagged for hauling illicit oil, has now registered under the Russian flag, muddying the waters for the U.S. when it comes to the legal grounds for a potential boarding.
According to experts, if the U.S. tries to forcibly board a vessel flying the Russian flag, it risks triggering a retaliatory move—not just from Moscow but potentially from Russia’s circle of allies as well. That’s the kind of development that can send shockwaves through the oil market and keep traders on their toes.
Yet will this be a side story in the Venezuela oil comeback story.   Venezula pumped more than 3 million barrels of oil each day before the Chavez-Maduro socialist revolution that turned into a cruel hit, causing tears by ransacking the industry with years of theft and mismanagement.  Neglected infrastructure and after the Chavez regime threatened U.S. oil companies stole their assets and kicked them out of the country, Not to mention threatening their lives,  caused their oil production to drop to near record lows so much so that it even threatened the future of many of their oil fields
But I share President Trump’s optimism: if U.S. energy interests return to Venezuela, production could ramp up much faster than most skeptics expect.
In the short run, we could see a meaningful rebound. Picture experienced engineers heading back to Venezuela’s aging oil fields, breathing new life into neglected wells and clearing backlogs. With just a modest infusion of capital—potentially from export revenues—output could surge by 200,000 to 300,000 barrels per day within months. Those with a positive outlook believe that quick operational fixes, combined with targeted investments, might restore an additional 300,000 to 350,000 barrels, pushing total production toward 1.4 million barrels per day.
If sanctions ease and the political environment becomes more welcoming, the prospects become even brighter. Some analysts foresee Venezuela hitting 1.1 to 1.2 million barrels per day by the end of 2026, with the possibility of a swift 100,000 to 150,000 barrel-per-day boost in as little as three months.
Looking further ahead, the medium-term opportunities are even more compelling. With strategic investment and operational upgrades—especially in the prolific Orinoco Belt—Venezuela could realistically return to the 2 million barrels per day level last seen in the mid-2010s. Achieving this wouldn’t necessarily require a huge influx of new capital; smart workovers and targeted enhancements could do the trick. To truly reinvigorate the sector, experts estimate Venezuela would need $15-20 billion over the next decade to approach 2.5 million barrels per day, and up to $9 billion annually after the initial push to reach 2 million barrels by 2032.
Restoring Venezuela’s oil production to its former capacity is an ambitious objective, but one within reach for the U.S. energy sector. Industry analysts have projected timelines of 15 to 16 years and estimated costs between $183 and $185 billion to rebuild upstream operations and infrastructure, beginning in 2026. Nevertheless, the proven capabilities of the U.S. energy industry should not be underestimated, as it has consistently surpassed expectations when tasked with advancing American interests.
Industry experts, such as those at Wood Mackenzie, believe that improvements in operational efficiency and modest new investments could propel production back to 2 million barrels a day within a few years. They anticipate a possible initial dip—down 200,000 to 300,000 barrels in early 2026—but expect a rapid recovery, especially if fresh capital is injected. For bigger, sustained gains, challenges remain, particularly with Orinoco Belt projects costing over $80 per barrel, which makes profitability a major hurdle.
Rystad Energy’s outlook is a bit more measured, projecting that Venezuela could add about 300,000 barrels per day over the next two to three years with limited spending, potentially reaching 1.4 million barrels daily. Reaching 2 million barrels by 2032 and 3 million by 2040 would require a massive $183 billion in total investment, including $30-35 billion in international funds upfront, and $8-9 billion per year thereafter.
The takeaway?  The Consensus is that Venezuela has the potential to quickly add 200,000 to 400,000 barrels per day in the near term, but major, long-lasting increases will demand significant commitment. The path is challenging—high costs, market uncertainty, and ongoing political risks will keep investors cautious Yet With the trump administration’s focus on energy and national security and that they view energy as a priority don’t be surprised that with trump’s guidance and a stable Venezuela that we can see probably one of the greatest comeback stories in oil since the days of Lazarus.
Fox News reported that Representatives of the Energy Department and White House did not immediately respond to requests for more details. At recent rates before the US blockade, the volume would represent about 30 to 50 days’ worth of Venezuelan oil production. The US itself produces about 13.8 million barrels per day. At current prices for the US benchmark West Texas Intermediate, the volume could be valued at upwards of $2.8 billion.

Since the U.S. embargo last year, some reports say that Venezuela has accumulated nearly 48 million barrels of crude and up to 22 million more on seized tankers.
There is no doubt that the Venezuelan situation is going to be bearish for crude prices in the short run, though keep in mind oil is still locked in a trading range and it’s unlikely that we are going to see prices collapse, but they’re going to have a hard time growing with the Venezuelan oil overhanging the market. Assuming that the tensions between the U.S. and Russia over this oil tanker that the U.S. has been following don’t blow up into a bigger international incident, the momentum for a more stable Venezuela looks better than it has since Chávez was elected. Traders can play both sides of the market, but we’re not looking for a major move one way or the other but definitely feel more comfortable selling rallies than buying breaks at this point.
Natural gas is rebounding after the Fox Weather channel reported of a major warm up across the United States.   Now Fox Weather is reporting that two cross-country storms are expected to bring rain to millions across more than 30 states beginning Thursday, packing a severe weather threat for the Deep South and the potential for snow from the higher elevations of the Four Corners through the Central Plains and Upper Midwest. Computer forecast models are in stronger agreement that two distinct areas of low pressure will move out of the southern Rockies, back-to-back, beginning Thursday, after forecasts earlier in the week called for just one cross-country storm. he first storm will race out of the Southwest on Thursday and is expected to bring rain across much of the Southern Plains, including Oklahoma and North Texas on Thursday. A low-level severe thunderstorm threat covers that same area and extends into Arkansas and southern Missouri Wednesday night into Thursday.
Snow showers will be possible across the higher elevations in parts of New Mexico, Colorado, Utah and Arizona Thursday. Winter weather alerts span 600 miles as consecutive storms bring snow and ice threats. As this first storm sprints east, a widespread area of rain will cover much of the Midwest, Mississippi and Tennessee valleys beginning Thursday afternoon. A low-end flash flood threat covers Chicagoland in Illinois, Wisconsin and Indiana.
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