Chevron Stock Surges Amid U.S. Military Action in Venezuela

U.S. Oil Stocks Surge After Trump's Venezuela Move

Shares of U.S. oil companies surged in premarket trading on Monday following a major military operation by the Trump administration in Venezuela. Chevron (CVX.N) led the gains, with its stock rising approximately 7.3% as investors speculated about expanded U.S. access to Venezuela's vast oil reserves. The operation, which captured President Nicolás Maduro, intensified expectations that Washington might ease restrictions on Venezuelan crude exports.

President Donald Trump stated the U.S. needs "total access" to Venezuela's oil fields to rejuvenate the country's energy sector. He emphasized that American oil companies would play a central role in investing billions to rebuild infrastructure and boost production. Chevron, which remains the only major U.S. company operating in Venezuela, has a significant stake in the potential developments.

Venezuela holds the world's largest proven oil reserves, estimated at 303 billion barrels. However, production has fallen sharply due to years of mismanagement and underinvestment. U.S. refiners like Valero Energy and PBF Energy also saw significant gains as markets anticipated renewed crude access.

Why Did This Happen?

The U.S. military operation removed President Maduro, a move framed by Trump as a step toward restoring stability and unlocking Venezuela's oil potential. Trump stated the U.S. would "run" the country temporarily until a "safe and proper transition" occurs. Chevron emphasized its focus on employee safety and asset protection in Venezuela according to analysts.

The move follows years of U.S. pressure on Venezuela over sanctions and diplomatic measures. With no major foreign oil companies currently operating in the country, Chevron is in a unique position to benefit from any policy shifts.

How Did Markets React?

Oil stocks across the board experienced significant gains. Alongside Chevron, shares of Exxon Mobil and ConocoPhillips rose between 3% and 5.5%. Oilfield services companies such as SLB and Halliburton also saw double-digit gains as investors anticipated increased activity in Venezuela's oil sector.

Gold and silver prices also surged as geopolitical tensions heightened. Spot gold rose nearly 2% to a one-week high, while silver climbed over 4% amid safe-haven demand according to market analysts. Analysts noted that the market's reaction balanced optimism about potential U.S. energy investments with concerns over global oil supply dynamics and geopolitical uncertainty.

What Are Analysts Watching Next?

Analysts remain cautious about the long-term implications of the U.S. intervention. While Trump's vision for reviving Venezuela's oil infrastructure is clear, analysts stress that political stability and regulatory clarity will be essential for U.S. companies to invest confidently. Chevron, for example, currently operates in a highly regulated and uncertain environment.

The administration has not yet outlined how it would facilitate a broader return of American oil companies to Venezuela. Market observers are watching for potential bidding processes for oil and gas blocks, though the inclusion of non-U.S. firms in such processes remains uncertain. Chevron's current operations represent about one-third of Venezuela's current production. However, restoring Venezuela to its peak output of 3 million barrels per day will require substantial investment and time. Analysts suggest that U.S. Gulf Coast refiners, which are well-suited to process heavy crude from Venezuela, could benefit the most from any production increase.

The global oil market remains oversupplied, with prices trading near $60 per barrel for Brent crude. This environment limits the appetite for high-risk investments, making it harder for companies to justify large-scale reentry into Venezuela.

Precious metals and defensive assets have seen increased demand as investors react to the unfolding situation. Gold's rise reflects both geopolitical uncertainty and expectations of further interest rate cuts by the Federal Reserve.

The U.S. capture of Maduro has triggered broader uncertainty in Latin America and raised questions about U.S. intentions in the region. Analysts suggest that market stability will depend on how the interim government is structured and whether other nations will support the Trump administration's actions.