\t\t\t \t\t\t\t\t \t\t\t\t\t It\u2019s no secret that one of the main goals of the U.S. strike on Venezuela \u2014 which ended with the capture of then-president Nicol\u00e1s Maduro \u2014 was to secure access to the country\u2019s oil.<\/p>\n
Shortly after the invasion, the White House claimed it intends to control Venezuela\u2019s oil sales \u201cindefinitely.\u201d\u00a0<\/p>\n
Analysts say that such disruption could hurt Argentina\u2019s fossil fuel industry, which relies almost entirely on Vaca Muerta, a vast shale oil and gas field in northern Patagonia.<\/p>\n
\u201cWith the current international oil price, Vaca Muerta (which produces unconventional oil) is operating at cruising speed, while conventional oil faces difficulties due to the reduction in operating margins,\u201d a report by consulting firm PxQ said.\u00a0<\/p>\n
Oil prices are already relatively low due to oversupply, with the U.S. becoming the world\u2019s main producer in 2018 and OPEC+ countries (a large group of producing nations) consistently increasing their production goals. From 2022 to 2026, crude oil went from over US$100 to US$56 a barrel. According to the Wall Street Journal, U.S. President Donald Trump expects to produce enough crude from Venezuela\u2019s oilfields to drive down the price even further, to about US$50.<\/p>\n
For unconventional reservoirs like Vaca Muerta, which require major investment for extraction through techniques such as fracking, lower oil prices could be a determining factor in deciding to pursue investments.<\/p>\n
\u201cIf the U.S. moves forward with controlling strategic assets, lifts restrictions, and Venezuela\u2019s internal political situation allows it, the recovery of oil production would mean a negative external shock for Argentina, due to the fall in international prices,\u201d the PxQ document added.<\/p>\n
A separate report by Paspart\u00fa, another consulting firm, said that, following the U.S. military operation in Venezuela, Argentina\u2019s export plans could be affected. The document said that, if in the short term prices rise due to geopolitical uncertainty and reduced production, investment plans in Vaca Muerta could accelerate. However, if in the medium term, the price of the Brent barrel falls, investments would drop.<\/p>\n
Before the invasion, sources from YPF, Argentina\u2019s state-owned oil and gas company and the main producer in the Vaca Muerta region, had told the Herald that they had a contingency plan for a potential fall in prices.\u00a0<\/p>\n
That scenario was behind the sale of YPF\u2019s share of Profertil in December \u2014a fertilizer producer of which the energy company owned half \u2014 for US$635 million. The rationale was that, with that extra cash, YPF could finance its production even with reduced oil prices.<\/p>\n
Oil production in Venezuela While Venezuela holds the world\u2019s largest proven oil reserves (306 billion barrels as of 2026), its impact on global prices could be limited, some analysts posit. \u201cThere are several structural issues with Venezuela\u2019s oil sector that render investment less attractive,\u201d said a report by BMI, a British research firm and subsidiary of Fitch Solutions, published this week.<\/p>\n
First, decades of mismanagement and U.S. sanctions have deteriorated Venezuela\u2019s oil infrastructure. Trump has made it clear that he hopes to expand U.S. involvement in the sector, with companies spending \u201cbillions\u201d to reverse production declines.<\/p>\n
On the geological front, BMI said, the \u201cbulk of the country\u2019s crude is in heavy, high-sulphur oil,\u201d which is \u201ccomplex and expensive to extract, requiring diluent to blend with lighter hydrocarbons.\u201d\u00a0<\/p>\n
The report added that contracts require the national oil company, PDVSA, to hold a majority stake in licences and that U.S. sanctions have further limited activity by international oil companies over the past decade.<\/p>\n
Moreover, since mid-December, the U.S. Navy has been blocking the export of Venezuelan oil. The campaign intensified after Maduro\u2019s capture.<\/p>\n
\u201cWhile Venezuelan exports are curtailed by the ongoing blockade, they make up less than 1% of global supply, limiting the impact on oil prices in the near term,\u201d the report said.<\/p>\n
\u201cUpside risks to Venezuela\u2019s oil production will weigh on oil prices in the long term, but in the near term, prices will be little affected by a temporary loss or gain in production levels,\u201d said BMI.<\/p>\n
\u2018Geopolitical risk\u2019 The Paspart\u00fa report added another consideration, aside from the price.<\/p>\n
\u201cArgentina would lose an intangible asset when it comes to \u2018selling\u2019 its production \u2014 mainly in terms of liquified natural gas (LNG) \u2014 and attracting investment, as South America would cease to be a \u2018region of peace,\u2019 far from the geopolitical risk of regional conflicts,\u201d the Paspart\u00fa analysis added, saying that potential LNG offtakers usually highlight Argentina\u2019s distance from \u201chot\u201d zones when speaking about diversifying suppliers.<\/p>\n
\u201cThe loss of this comparative advantage could place Vaca Muerta LNG in a less relevant position in global geopolitics,\u201d the report said.<\/p>\n
However, PxQ also took geopolitics into account and reached a more positive outcome, positing that the negative effects on the Argentine oil industry could be offset.<\/p>\n
\u201cIf the intervention in Venezuela is successful,\u201d the report said, \u201cthis could mean a jump in Trump\u2019s popularity and could even begin to pave the way for a successor who would continue to provide financial and economic support [to Argentina] through 2027.\u201d<\/p>\n
The situation is unprecedented and moving quickly, and all bets are off.<\/p>\n
\u201cStabilizing Venezuela is a major challenge, just as complicated as recovering its oil production after five years of decline and deterioration of infrastructure,\u201d PxQ said.<\/p>\n","protected":false},"excerpt":{"rendered":"
It\u2019s no secret that one of the main goals of the U.S. strike on Venezuela \u2014 which ended with the capture of then-president Nicol\u00e1s Maduro \u2014 was to secure access to the country\u2019s oil. Shortly after the invasion, the White House claimed it intends to control Venezuela\u2019s oil sales \u201cindefinitely.\u201d\u00a0 Analysts say that such disruption […]<\/p>\n","protected":false},"author":12,"featured_media":24782,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7397,414,673,2511,6969],"tags":[7396,595,1475,3375,6967],"class_list":["post-24781","post","type-post","status-publish","format-standard","has-post-thumbnail","category-argentine-oil-and-gas","category-business","category-energy","category-vaca-muerta","category-venezuelan-oil","tag-argentine-oil-and-gas","tag-business","tag-energy","tag-vaca-muerta","tag-venezuelan-oil"],"_links":{"self":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/24781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/comments?post=24781"}],"version-history":[{"count":0,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/24781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media\/24782"}],"wp:attachment":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media?parent=24781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/categories?post=24781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/tags?post=24781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}