US midterms won’t derail Venezuela’s oil recovery but could delay greenfield upside

The Democratic victory in the 2026 US midterm elections has given the party control of both chambers of Congress, limiting President Trump’s domestic agenda from January 2027. However, foreign policy remains largely within the president’s remit, as demonstrated by his interventions in Venezuela this year, from the capture of Nicolas Maduro to the reopening of the country’s oil sector. These developments have highlighted how closely Venezuela’s oil recovery is tied to decisions in Washington. However, Rystad Energy’s analysis suggests that Venezuela’s near-term oil recovery is unlikely to be derailed by the latest election result. The bigger risk lies further down the line, as increased congressional scrutiny could delay around 0.5 million bpd of potential production growth until after 2040.

Venezuela’s near-term recovery is being driven primarily by brownfield activity, including well reactivations, workovers and infill drilling. These projects have shorter lead times and require fewer new approvals, supporting crude production growth from approximately 1.2 million bpd in October 2026 to around 1.5 million bpd by 2028, an increase of roughly 300,000 bpd. Sanctions implementation and licensing by the US Treasury’s Office of Foreign Assets Control (OFAC) also remain largely under executive control, limiting what a Democratic Congress can change directly. 

The picture becomes less certain further out, as growth increasingly depends on greenfield developments, larger investment commitments and the operators selected to deliver them. Rystad Energy’s existing upside scenario sees Venezuelan production approaching 3 million bpd by 2040 assuming stronger prices and continued policy support. A new sensitivity following the midterm result suggests greater congressional scrutiny could delay selected greenfield projects by one to three years, pushing around 0.5 million bpd of potential 2040 production further out. The impact is concentrated in longer-cycle projects rather than the brownfield-led recovery expected over the next few years.

However, that growth will be harder to deliver if political scrutiny delays or challenges operators' ability to develop their assets. North American Blue Energy Partners (NABEP) is a case in point. Its three production participation contracts have lifted combined output from roughly 90,000 barrels per day (bpd) at the end of 2024 to nearly 200,000 bpd currently, led by Petrozamora. The company is already facing questions from Democratic lawmakers over its selection and the legal basis for its agreements, raising broader questions about Venezuela's operating environment and its ability to attract investment to sustain longer-term recovery.

Greater scrutiny doesn’t change Venezuela’s underlying resource potential. Most of the near-term recovery involves bringing existing wells back online, which doesn’t require congressional approval, so I wouldn’t expect the midterms to slow that down. The bigger risk is to greenfield projects, which could be delayed by several years. The oil isn’t going anywhere, but it may take longer to reach the market. ExxonMobil’s recently announced MOU with PDVSA remains at an early stage, with no committed capital or development timetable yet disclosed; this suggests interest in unlocking Venezuela’s petroleum potential rather than any concrete investment commitments. A longer-term complication, however, is Venezuela’s own election. A new government could revisit the contracts signed under the interim administration, creating uncertainty for projects that require 10 to 20 years of political and regulatory stability,”

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The political reset in January has also reshaped Venezuela's oil export patterns, with a much larger share of the country's crude now heading to the US and India. Together, the two countries accounted for around three-quarters of Venezuelan crude exports over the period shown. India, in particular, presents an opportunity for Venezuela to regain market share from Russia, which has become a major supplier of crude oil to the country since the outbreak of the war in Ukraine.

At the same time, US policy continues to place greater pressure on buyers of Russian crude than on those purchasing Venezuelan oil. However, the change isn’t like-for-like as Venezuela's main export grade, Merey, is a heavy, high-sulfur crude that is significantly thicker and more difficult to process than Russian Urals. It requires specialized refinery equipment to turn it into usable fuels, meaning only India's more complex refineries can readily absorb additional volumes. Higher shipping costs to Asia also make Venezuelan crude less competitive when Russian Urals is available at steep discounts.

Ultimately, Venezuela's ability to capture a larger share of India's imports will depend on both commercial economics and US policy. If Washington continues to apply greater pressure on Russian crude buyers while allowing Venezuelan trade to expand, Venezuela could gain a competitive advantage. However, differences in crude quality, refinery compatibility and freight costs mean it is unlikely to replace Russian barrels one-for-one. For the US midterms, the key point is that the election result is unlikely to disrupt Venezuelan exports in the near term, as any change in congressional control would not automatically alter existing trade flows or the current policy framework.

From a geopolitical perspective, Venezuela's next election could become an increasingly important signpost for oil markets. No date has been agreed, although Washington has outlined a transition roadmap involving reforms to the judiciary and electoral authorities, followed by the declaration of a presidential vacancy and new elections. A Democratic victory in the US midterms could increase pressure on Trump to accelerate this process. Democrats have already questioned the lack of a clear democratic roadmap and could use congressional hearings, funding negotiations and oversight powers to demand firmer commitments. While their ability to dictate Venezuela's electoral calendar remains limited, they could raise the political cost of delaying the transition.

President Trump, however, faces a dilemma: holding elections sooner would allow him to claim credit for restoring democracy in Venezuela and bolster his foreign policy legacy, but could also put existing oil agreements at risk. A newly elected government could revisit deals reached with interim Venezuelan President Delcy Rodríguez, creating uncertainty for investors and potentially delaying planned projects. Allowing more time for economic recovery and investment before holding elections may therefore suit the Trump administration, particularly if it gives existing commercial arrangements time to take hold before a new government comes to power.

Contacts  
Radhika Bansal
Senior Vice President, Upstream Research
Phone: +47 24 00 42 00
radhika.bansal@rystadenergy.com

Jorge Leon
Head of Geopolitical Analysis
Phone: +34 6396 90050
jorge.leon@rystadenergy.com

Kartik Selvaraju
Senior Communications Manager (APAC) 
Phone: +65 8779 4619
kartik.selvaraju@rystadenergy.com

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