On Monday, shares of leading U.S. energy companies surged following President Donald Trump’s announcement of plans to seize control of Venezuela’s oil sector. Trump indicated that American corporations would rejuvenate the industry after the capture of President Nicolás Maduro.

Although this U.S. intervention might not immediately influence crude prices due to the existing market surplus, it has the potential to disrupt energy markets significantly.

Venezuela’s oil industry has been suffering from extensive neglect and international sanctions, resulting in its dilapidated state. Some analysts forecast that Venezuela could potentially double or even triple its current production of approximately 1.1 million barrels per day and swiftly return to its previous production levels. Others, however, anticipate a more prolonged recovery process.

Neal Dingmann of William Blair expressed skepticism, writing, “While the Trump administration suggests substantial investment by U.S. oil giants in Venezuela, political uncertainties and the relatively low oil prices might deter these actions in the near term.” He added that significant changes in Venezuelan oil production would demand substantial time and financial investment in infrastructure.

Any potential investment in Venezuelan energy infrastructure comes at a time when the global energy market is weakened. In the U.S., crude prices have dropped 20% from the previous year. The benchmark U.S. crude price has not exceeded $70 per barrel since June and hasn’t reached the $80 mark since the summer of 2024.

JPMorgan foresees a brief, sharp dip in Venezuelan production, but said recovery is expected to be swift. Production could reach 1.3 million to 1.4 million barrels per day within two years of a political transition.

“With new investments and major institutional reforms, output could potentially expand to 2.5 mbd over the next decade,” JPMorgan wrote.

There’s several factors that could impact Venezuelan production, including how quickly a government transition can take hold and how fast and willing multinational oil companies are to reenter the country, wrote John Freeman of Raymond James.

At the opening bell, shares in the energy sector moved broadly higher, particularly companies with large refinery operations.

Venezuela produces the kind of heavy crude oil that’s needed for diesel fuel, asphalt and other fuels for heavy equipment. Diesel is in short supply around the world because of the sanctions on oil from Venezuela and Russia and because America’s lighter crude oil can’t easily replace it.

Big refiners like Valero, Marathon Petroleum and Phillips 66 rose between 5% and 6% at the opening bell.

Oilfield service companies, those that actually go into the field and do the drilling and upkeep, rose even more sharply. SLB and Halliburton rose between 7% and 8%.

Major oil exploratory companies including ExxonMobil, Chevron and ConocoPhillips rose between 2% and 4%.