Nikos Tagoulis, a senior analyst at Intermodal, has examined the current state of the oil market and the impact of oil production in the U.S. on this market. According to him, the timing of the production increase resulting from new investments remains uncertain. Years of underinvestment and mismanagement have led to the deterioration of the country's energy infrastructure.
Venezuela's Oil Production and U.S. Energy Security
However, existing operations in Venezuela could help increase production early through repairs, well revivals, and optimizing existing capacities. Venezuelan oil production is expected to gradually increase starting next year. The Washington government is looking for two main reasons for this agreement: refinery compatibility and energy security. Venezuela's heavy and sour oil is well-suited for many Gulf Coast refineries in the U.S., and the geographical proximity of this country to the United States reduces transportation costs and delivery times.
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Changes in Oil Trade Patterns
Venezuelan oil, as a nearby source to the United States, has gained more attractiveness, especially after disruptions in Middle Eastern energy flows. Currently, Venezuelan oil exports have increased due to reduced sanctions and the release of suspended shipments. According to LSEG data, Venezuelan oil exports have nearly doubled since early 2026, with the U.S., India, and Europe being the main destinations. The U.S. share has increased from 31% to 51%, and India's share has risen from 4.5% to 22%.
According to Tagoulis, as Venezuelan oil exports increase, the dynamics of the regional oil market are also changing. Venezuelan oil has become more attractive as an option close to Canadian and Mexican oils. In 2026, both Canada and Mexico are diversifying their exports and establishing better connections with Asian buyers, which helps increase employment for large tankers.
Ultimately, the upward trend in Venezuelan oil production and exports is expected to strengthen short-term trade with the United States and increase demand for Aframax and Suezmax tankers. Overall, the improvement in Venezuela's oil sector should expand supply options in the Atlantic basin and enhance U.S. energy security.
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