It is widely acknowledged that a primary objective of the U.S. intervention in Venezuela, culminating in the apprehension of former president Nicolás Maduro, was to ensure access to the nation’s oil resources. Shortly after the invasion, the White House asserted its intention to exert control over Venezuela’s oil sales “indefinitely.” Experts indicate that this disruption may adversely affect Argentina’s fossil fuel sector, which is heavily dependent on Vaca Muerta, a significant shale oil and gas formation located in northern Patagonia. “With 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,” a report stated. Oil prices currently reflect a state of relative low due to an oversupply situation, stemming from the U.S. emerging as the predominant global producer in 2018, alongside OPEC+ nations persistently raising their production targets. Between 2022 and 2026, the price of crude oil declined from over US$100 to US$56 per barrel. As reported, U.S. President Donald Trump anticipates that sufficient crude production from Venezuela’s oilfields will lead to a further decline in prices, potentially reaching around US$50.
In the context of unconventional reservoirs such as Vaca Muerta, which necessitate substantial investment for extraction via methods like fracking, declining oil prices may play a critical role in influencing investment decisions. “If the U.S. advances in regulating strategic assets, removes restrictions, and Venezuela’s domestic political conditions permit, the resurgence of oil production would result in a negative external shock for Argentina, stemming from the decline in international prices,” the document noted. A distinct analysis from Paspartú, a different consulting firm, indicated that, in the aftermath of the U.S. military operation in Venezuela, Argentina’s export strategies may face repercussions. The document indicated that, should prices increase in the short term as a result of geopolitical uncertainty and diminished production, investment initiatives in Vaca Muerta may gain momentum. However, should the price of the Brent barrel decline in the medium term, there would be a corresponding decrease in investments. Prior to the invasion, information from YPF, Argentina’s state-owned oil and gas enterprise and the leading producer in the Vaca Muerta area, indicated to the Herald that they had developed a contingency strategy in anticipation of a possible decline in prices.
The sale of YPF’s stake in Profertil in December, a fertilizer producer in which the energy company held a 50% interest, was executed for US$635 million. The reasoning was that, with the additional capital, YPF could sustain its production levels despite lower oil prices. While Venezuela possesses the largest proven oil reserves globally, totaling 306 billion barrels as of 2026, analysts suggest that its influence on international prices may be constrained. “There are several structural issues with Venezuela’s oil sector that render investment less attractive,” stated a report released this week. Decades of mismanagement, coupled with U.S. sanctions, have led to the deterioration of Venezuela’s oil infrastructure. Trump has articulated his intention to enhance U.S. engagement in the sector, with firms investing “billions” to counteract production declines. According to a report, the geological landscape reveals that the “bulk of the country’s crude is in heavy, high-sulphur oil,” which is “complex and expensive to extract, requiring diluent to blend with lighter hydrocarbons.” The report indicated that agreements stipulate the national oil company, PDVSA, must maintain a majority interest in licenses, while U.S. sanctions have increasingly constrained the operations of international oil companies in the last ten years. Furthermore, beginning in mid-December, the U.S. Navy has implemented measures to obstruct the export of Venezuelan oil. The campaign escalated following Maduro’s capture.
“While Venezuelan exports are curtailed by the ongoing blockade, they constitute less than 1% of global supply, thereby limiting the impact on oil prices in the near term,” the report stated. “Upside risks to Venezuela’s 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,” stated BMI. The Paspartú report introduced an additional factor, beyond the price itself. “Argentina would lose an intangible asset when it comes to ‘selling’ its production — mainly in terms of liquified natural gas — and attracting investment, as South America would cease to be a ‘region of peace,’ far from the geopolitical risk of regional conflicts,” the analysis added, noting that potential LNG offtakers typically emphasize Argentina’s distance from “hot” zones when discussing supplier diversification. “The loss of this comparative advantage could place Vaca Muerta LNG in a less relevant position in global geopolitics,” the report stated. However, PxQ also considered geopolitical factors and arrived at a more favorable conclusion, suggesting that the adverse impacts on the Argentine oil sector could be mitigated. “If the intervention in Venezuela is successful,” the report stated, “this could signify an increase in Trump’s popularity and may even start to create a pathway for a successor who would maintain financial and economic support [to Argentina] through 2027.” The circumstances are unparalleled and evolving rapidly, rendering all assumptions uncertain. “Stabilizing Venezuela is a major challenge, just as complicated as recovering its oil production after five years of decline and deterioration of infrastructure,” PxQ stated.