Chevron stock: US oil stocks rose sharply in premarket trading on Monday as investors reacted to US president Donald Trump’s move against Venezuela’s leadership, raising hopes that American companies could gain broader access to the country’s vast oil reserves, as per a report.

Chevron stock price rises as CVX gains on Venezuela exposure

Chevron, the only major US oil company currently operating in Venezuela, saw its shares climb more than 7% in pre-market trading. Refiners also posted strong gains, with Phillips 66, Marathon Petroleum, Valero Energy and PBF Energy up between about 5% and 16%.

US oil stocks rally in premarket as Trump targets Venezuela’s leadership

The surge followed Trump’s comments after the arrest of Venezuelan President Nicolas Maduro, which heightened expectations that the US could relax restrictions on Venezuelan crude exports, as per a Reuters report.

Trump said that, "We're going to have our very large U.S. oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, oil infrastructure, and start making money for the country," as quoted by Reuters.

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Venezuela’s oil output collapsed after years of sanctions

Venezuela was once a major force in global oil markets, producing as much as 3.5 million barrels per day in the 1970s, more than 7% of global output. Production fell below 2 million barrels per day in the 2010s and averaged around 1.1 million barrels per day last year, or about 1% of global supply, after years of sanctions and underinvestment.

Heavy Venezuelan crude aligns with US Gulf Coast refineries

Venezuelan crude is heavy and high in sulfur, making it well suited for producing diesel and heavier fuels, though typically at lower margins than some other grades, especially those from the Middle East, as per the Reuters report. According to Pepperstone research strategist Ahmad Assiri, "This type of crude aligns well with the configuration of U.S. Gulf Coast refineries which were historically designed to process such grades," as quoted by Reuters.

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Chevron positioned to benefit, but recovery may take time

Chevron’s existing operations in Venezuela under a US waiver position it as a potential early beneficiary of any policy shift, while refiners could benefit from increased supplies of heavy crude closer to home. Even so, analysts cautioned that any significant recovery in Venezuelan oil production would likely take time due to political uncertainty, deteriorated infrastructure and years of underinvestment.

JP Morgan flags potential return of seized assets

Analysts at JP Morgan pointed out that the US action could also create the way for the return of assets seized by Venezuela in 2007 under late leader Hugo Chavez, as per the Reuters report.

FAQs

How much did Chevron stock price increase today?
Chevron shares rose more than 7% in premarket trading.

Why is CVX important in Venezuela?
Chevron is the only major US oil company currently operating in Venezuela.