who controls its energy and what Maduro’s arrest means

The arrest of Nicolás Maduro has thrown one of the world’s most politically fraught oil industries back into focus, forcing investors to reassess who controls Venezuela’s crude resources and whether they can be meaningfully revived after decades of decline.

For now, the answer may seem straightforward. “Petróleos de Venezuela (PDVSA), the state-owned oil company, controls the majority of the oil production and reserves,” said Andy Lipow, president of Lipow Oil Associates. 

American energy corporation Chevron operates in the country through its own production and a joint venture with PDVSA, while Russian and Chinese firms also participate through partnerships, though “majority control is still with PDVSA,” Lipow said. 

Venezuela nationalized its oil industry in the 1970s, which led to the creation of PDVSA. Oil output peaked at about 3.5 million barrels per day in 1997, but has since plunged to an estimated 950,000 barrels per day, with around 550,000 barrels per day exported, data provided by Lipow Oil Associates showed.

If a more pro-U.S. and pro-investment government takes shape in Venezuela, Chevron would be “best placed” to expand its role, said Saul Kavonic, head of energy research at MST Financial. European companies like Repsol and Eni could also benefit, given their existing positions in Venezuela, he said.

“Since it is unclear at this time who is in charge in Venezuela, we might see exports completely halt as the buyers don’t know to whom to send the money,” said Lipow. He added that the latest round of U.S. sanctions on a shadow fleet of tankers has severely affected exports, forcing Venezuela to cut production.

The shadow fleet refers to tankers that operate outside traditional shipping, insurance and regulatory systems to move crude from sanctioned countries. These vessels are commonly used to transport oil from nations such as Venezuela, Russia and Iran, which face U.S. restrictions on energy exports.

Lipow expects Chevron to continue exporting 150,000 barrels per day, limiting any immediate supply impact. Still, he said the broader uncertainty could add a short-term risk premium of about $3 per barrel.

That bump would come against a market that many analysts see as adequately supplied, at least for now. “The oil market currently is trending towards oversupply,” Rapidan Energy Group’s Bob McNally said, calling the immediate impact “almost a nothing burger.”

Venezuela’s longer-term…