Latin American oil giants shrug off potential Venezuelan comeback; smaller players seize near-term upside

Argentina, Guyana and Brazil are poised to lead Latin American oil production growth in 2026, even though the possible return of Venezuelan barrels poses questions for the region’s long-term capital expenditure strategy. While the supermajors continue to flag Venezuela as difficult to underwrite on a long-term basis, traders and players like Trafigura and Hillcorp are increasingly drawn to near-term, structured opportunities in the country, signaling a possible rebalancing of portfolios. Although legal uncertainties persist and institutional legitimacy remains thin, recent reforms, such as the lifting of sanctions and the overhaul of Venezuela’s hydrocarbons law, reinforce US efforts to market Venezuelan barrels. Rystad Energy analysis estimates that flagship projects in Argentina, Guyana and Brazil, which are expected to add more than 700,000 barrels per day (bpd) of oil production this year, will continue to outcompete Venezuela through at least 2030. In the short term, 300,000 bpd of Venezuelan supply could be added to the market, but the likelihood of shifting investment from current Latin American powerhouses to beleaguered Venezuelan infrastructure amid an uncertain business environment remains limited.

A Venezuelan oil industry makeover will be costly and lengthy, with the big three in the region – Argentina, Guyana and Brazil – remaining largely indifferent to the estimated, near-term return of Venezuelan crude. Oversupply, whether from Venezuelan or even Iranian barrels, is what is truly testing the financial resilience of operators who would otherwise gain from a revived oil industry in the Bolivarian Republic.

Radhika Bansal, Vice President, Oil & Gas Research, Rystad Energy