By Michael Tavoliero
Venezuelan oil could re-emerge as a meaningful U.S.-linked supply over the medium to long term. Lower prices pose risk of shifting market demand away from the North Slope. If Alaska fails to address competitiveness now, the situation could create real headwinds.
During Maduro, Venezuela’s oil output fell far below its capacity. Its access to U.S. markets swung sharply. In parallel, much of the remaining export flow, especially to China, moved through sanctions-era channels and typically cleared at steep, variable discounts to Brent/ICE Brent.
Venezuela could again gain significance as a U.S.-linked supply source. Its crude output recovered to around 0.9 million b/d by late 2024 after years of collapse from mismanagement and sanctions. Following reports of Maduro’s capture, U.S.–Venezuela talks (including Chevron’s licensing discussions) have floated 30–50 million barrels moving to the U.S. under new arrangements and potentially broader reentry for U.S. firms. If those barrels materialize, Gulf Coast refineries, built and upgraded to run heavy, sour crude like Venezuela’s, would likely be first in line.
However, years of underinvestment mean Venezuela’s fields and infrastructure are in rough shape; estimates run into hundreds of billions of dollars of capital expenditures and many years to get back to multi-million-barrel production. Even after the intervention, the immediate impact on North American producers may be limited, unless there is a rapid and large Venezuelan ramp, which is not the base case.
Although Venezuela has potential as a big U.S. supply source, it will not be a quick floodgate. The US may see gradual additional heavy barrels into Gulf refiners over 5–10+ years, not a switch flipped in one or two.
If Venezuelan crude hits the US markets, one immediate impact to Alaska’s price and competitiveness is the comparable measure of quality.
Alaska North Slope (ANS) crude is a medium, slightly sour grade that mostly moves to West Coast refiners and some exports to Asia. Those markets are already facing changing refinery capacity and demand patterns.
Venezuelan barrels, by contrast, will largely target Gulf Coast refiners configured for heavy crude. They are not the same market, but in a global system, more heavy supply equals some downward pressure on overall prices, all else equal. If Venezuelan production slowly rises, ANS gets marginal price pressure, but nothing catastrophic, especially if OPEC and other producers adjust. But if, in a more aggressive scenario, Venezuela climbs back toward 2–3 million bbl/d over time and exports a lot to the U.S., then Alaska will feel it via lower long-run prices, which hit high-cost North Slope projects first.
Right now, major ratings and market commentary say impacts on North American producers, including Alaska, are “limited” under current trajectories.
The most critical impact to Alaska may be capital competition. There are only so many upstream investment dollars in the majors’ budgets. That is where Venezuela really competes with Alaska. The new Venezuela policy is explicitly inviting Chevron, Exxon, ConocoPhillips, etc. to reinvest in Venezuelan fields and infrastructure.
Alaska’s North Slope is capital-intensive, remote, and politically contested, even as production is finally positioned to grow again in the 2030s with new projects. Alaskan commentators are already flagging Venezuela as a direct rival for investment attention: if Venezuela is seen as a huge, discounted resource play with political cover from Washington, CFOs may prioritize barrels there over frontier or higher-cost Alaska developments.
Even if ANS barrels continue to find buyers, Alaska could still see a quieter but meaningful shift in investment priorities: fewer North Slope projects get sanctioned, or they move more slowly, if Venezuelan barrels start to look cheaper, faster, and more attractive on a risk-adjusted basis. Inside oil companies, the comparison becomes hard to ignore: why commit scarce capital to high-cost, logistically complex Arctic development at $X per barrel when a similar barrel in the Orinoco belt might be brought on for $X–Y with fewer delays and a shorter payback window?
The continued impacts of regulatory realities and political optics also produce two possible narratives impacting Alaska.
What happens when the White House says, “We have secured new supply from Venezuela”? This will signal less urgency to support controversial expansions in Alaska (ANWR, offshore, new pipelines), especially under progressive administrations that are already ambivalent about Arctic drilling.
Conversely, a national-security argument can cut the other way: if Venezuelan stability looks shaky or contested, Alaska remains the only truly secure, domestically controlled, large conventional basin. That can still be leveraged politically if Alaskans make the case well.
In the next 0–3 years, Venezuela is mostly a headline. Exports are rising off a low base and flowing to Gulf Coast refiners that are not buying ANS, so Alaska feels little beyond price noise. The real threat is 3–10+ years out. If Venezuela becomes “investable,” it can crowd out North Slope capital and modestly soften global prices. This is exactly the squeeze that hits high-cost barrels first.
Alaska’s answer is to win on certainty and competitiveness. It must also start now with fiscal resilience. That means cutting the above-ground risk premium through stable fiscal terms and predictable permitting, marketing ANS as secure, rule-of-law U.S. supply, and driving efficiency and infrastructure optimization (TAPS utilization and West Coast/Asia access) so ANS stays off the margin. But it also means tightening the state’s belt today by reducing operating costs and building a leaner budget posture, so Alaska can absorb sudden, unimagined price downturns without lurching into crisis.
So the US intervenes in Venezuela to protect us from drugs (or migrants) and the author’s answer to the risk that Alaska will see reduced capital expenditures is for the State to “tightening the state’s belt today by reducing operating costs and building a leaner budget posture”–are you suggesting the oil companies need a tax break and the State should further shrink its budget and services?
Heck YES oil companies need a tax break. How do you expect to be competitive? And if our market is enticing enough, then the State will still make money, especially with the LNG. But the LNG will take time.
Satire? (I hope).
Alaska has been a boom and bust state for commercial fishing, the forestry industry and the oil industry. Our main problem lies in Juneau, with the unethical legislature. They refuse to address the wasteful spending and do what we elected them to do. Mainly the corrupt rino’s are the problem. Fix that and our state can focus on staying prosperous.
I’ve often wondered WHY Alaska isn’t more diversified. Does it mean better education …. supporting more college graduates who are interested in creating Alaskan businesses other than logging, fishing, hunting, drilling or mining. Most other states create jobs in other fields. Just saying…
Location and logistics are the biggest barriers. Nothing wrong with the above mentioned industries, we just need to run them like real businesses. Less regulations and more streamlined operations.
We aren’t more diversified because on political party and their green / union supporters already figure they have a solution and are singularly focused on grabbing the Permanent Fund. When you have all your energy focused there, there is precious little left for anything else.
Note they actively ignored Duleavy’s attempt to expand statewide gambling into casinos. They also ignored his effort to start fish farming for trout. They haven’t been real supportive of space launch (Kodiak). But statewide fiber for broadband, everyone’s on board even though Starlink provides that service right now. Why? An appreciable percentage of that broadband $$$ makes it back into various campaigns. Starlink doesn’t. Simple. And corrupt. Cheers –
Tell me what these other jobs are Teri ?? Working at McDonald’s in boise for $10 per hr . Our mining sector needs to triple in production that will help stabilize things, and we need to start manufacturing some end user products for sure. If the bureaucrats will get the hell out of the way anything is possible.
The Alaska forest industry was not in any way a boom and bust situation. Instead, it was done on a sustained and sustainable basis. All the harvests on gov land were on a sustained yield basis as the law required. The two 600 ton-per-day pulp mills and numerous associated sawmills employed 4,000. Two federal 50-year contracts induced construction of the mills. The pulp was the highest grade in the world. It went into tires, food stuffs, fabrics, and industrial chemicals.
The Tongass NF harvests reached an annual high of about 450 million board feet. Now, an estimated 500 million board feet rot and die annually.
The industry’s demise was plotted and effectuated by state government, federal government, the AK commercial salmon industry and others. Trees grow back by themselves on the Tongass, and w/o the politics the industry could have lasted pretty much forever. Until TAPS came up on the step the AK forest products industry was the largest industrial tax payer, state or federal, in the state.
why are you blaming republicans?
Any experts out there who can explain what’s really going on?? Will capturing Venezuela Oil cause a bigger war which would Include China who is a Major Venezuela Creditor and reliance on Cheap Venezuela oil, and Russia you also depend heavily on Venezuela Oil.
Alaska needs to Diversify in to Other industries beside Oil. How does Alaska survive when there appears to be an over abundance of oil production from Canada, Texas and now Venezuela?? OR … Is Venezuela Oil just for Trump to Sell. He said he was Personally going to sell the Oil on the open market…. Is he keeping the oil revenue for himself or his family’s companies?
U.S. Oil companies in 2025 pumping more oil than ever Before! (Google): “US oil production in 2025 was higher than in 2024, reaching new record highs …in Permian Base (Texas)”. And in 2025, have Laid Off 20,000-30,000 U.S. Workers due to the abundance of oil being produced, its not profitable for them to produce More Oil! So Why are we using U.S. Military & Our TAX Dollars for Private Businesses such as U.S. Companies & Investment Firms and for Trump who said “He personally will sell Venezuela Oil on the open market? Lastly, We Don’t need another Iraq/Viet Nam war!!
Trump is addressing a problem that started long ago. He’s playing a strategic game against Xi Ping and Putin and setting the stage, moving and bluffing like a skilled poker player. Remember, it was strategy and resource dominance that defeated the Japanese in WWII.
I can tell you madero overthrew Venezuela and stole all the industry in that country. He robbed chevron, Bp, Texaco, hunt oil and on and on. Threw oil executives in prison. Madero is a murdering scumbag. It’s unfortunate the military didn’t climb to five hundred feet and toss him out the door of the helicopter. It would have saved us a lot of money.
Trump’s thirst for self aggrandizement has left America First, and Alaska behind, contrary to what Trump ran on and was elected on. The voters will not forget in 2026 that neither Senator Sullivan, or Rep. Begich have pushed back on Trump’s policies that harm Alaska.
Look back about 5 years Frank. On day one the Biden Admin shut this state down, and we’re still feeling the effects of this and Bidenomics. We need to clean house of Rinos like Murkowski who took millions from Biden to pay people to not work.
You’re now showing your commie colors again Frankie. So you like drug dealing murderers do ya .??
No mention of the closing California refineries where the majority of Alaskan oil has been shipped to since the beginning? I’m happy to see the U.S. finally address the Venezuela regime, but I sure hope they have plan to address the California regime, because those morons are killing us.
The President announced today the sale and disbursement of oil and money intention today with all the oil executives and CEOs attending relating their company’s part to the world where the oil would be sold. Venezuela is cooperating and so are government members. Actually, more fairness to oil purchase for countries that need it. None of the conversation was intended business to harm oil and prices or distribution in the USA. The author more times than not gets over excited on strong issues and has a tendency toward fear. Not what is really happening.
Best thing to do with California is let it keep going the way it’s going and avoid spending a cent there. They are in self destruct mode. All the wealthy are leaving, Ai is about to kill Hollywood. They are in their death throes. Let it rip.
you gleefully promote the end of the largest economy in the US? The 5th largest economy in the world? Without California, US tax collections drop dramatically increasing the trump budget deficit for your grand kids to try and pay off. “Where California goes, so goes the US”.
So should the State pay full PFDs?
How about an AvGas refinery in Alaska ? The state burns more AvGas than any state or region of the world and our 100LL comes from Texas . More AvGas burned in Ak in a day , than Europe in a month !
The state wants to make no investment in road infrastructure on the slope . Still no road to PtThomson . Took twice a long to drill and build infrastructure to produce the condensates . No way to clean up and oil spill out there . Wildcat drilling going on using ice roads . Now Sockeye is mammoth oil discovery and no roads being built . Ice roads are not needed once the oil is found .
Kuparek was found in 1978 and the gravel roads were built in 1979 . This really enhances the production of oil . Kuparek was in line within 36 months of discovery . I’ll bet sockeye takes 12-15 years to put into production . That’s the real cost of NorthSlope development. Capital for these projects are not that patient . Meaning 15 years of financing to produce the oil once it’s found makes any oil project on slope uneconomical.
“ None of the conversation was intended business to harm oil and prices or distribution in the USA”
Correct me if I’m wrong but he has publicly stated that he wants oil at 50$/barrel…if so, it would definitely harm oil prices and distribution!
FAFO, I did my part, 77 million didn’t listen. Tough luck folks, we own this debacle for 3 more years. Good luck.
Not we. Them.
Trump’s intention to flood markets with Venezuelan crude hardly sounds like an “Alaska First” approach. Are any of you Alaskan MAGA-types starting to have Doubts? Or are you doubling down and sticking with him simply because he hates the same things you hate?
There is no way in h*ll that Alaskan crude or capital projects can compete with those in Venezuela, provided that the business climate there is secure. It”s similar to another Saudi Arabia or Iraq. Low cost production, lots of it, and close to tidewater. No way Alaska can compete with that.
WTI at $59.12 does not bode well for the State, and Venezuelan production will push it lower still.
“………Are any of you Alaskan MAGA-types starting to have Doubts? Or are you doubling down and sticking with him simply because he hates the same things you hate?……..”
I don’t consider myself a MAGA guy, but I voted for Trump because I believed that the alternative was completely unacceptable, and I’m definitely sticking with him because he’s making “stuff” happen……….and he most definitely hates the same crap I hate.
I’m not really interested in the fantasy of another oil boom in Alaska. We pissed away a good $30 billion+ of the last one, and I see nothing that indicates that would change with another boom. I loved pre-oil Alaska, and I wouldn’t mind seeing our population shrink back down by a good 35% or more. AFAIC, Alaska North Slope Crude should be for Alaskans fueling use, our aviation fueling industry, national security, and not blown like a drunken sailor in port.
WTI at $59.12 does not bode well for the State” when you say the State you of course mean the State government, WTI at $59.12 is good for the people of Alaska, it’s not good for the government because they always and inevitably spend more than they should.
Low oil prices hurt the state government because they are still budgeting as if oil prices were astronomically high, even though history tells us that high oil prices are the exception and not the norm. When oil was above $100 a barrel for a few short months the legislature more than tripled spending and refused to cut when prices dropped, fortunately for them there was another brief period of time where oil went above $100 a barrel and so spending levels remained artificially high, just as they currently are. Oil is currently in the high $50 range with forecasts calling for it to remain in this neighborhood for the remainder of the year. If our government can’t budget based upon the historical average cost of oil there is a problem, and as we all know there is a problem. In the 2000’s oil averaged in the $30-$70 range, in the 2010’s oil averaged in the $70-$80 range, and the 2020’s so far oil averaged in the $50-$80 range.
A politically secure environment is crucial for investment, Venezuela does not offer that and they have not offered that. After the government siezure of oil company assets in the 1970’s and the 2000’s Venezuela still owes Conoco and Exxon billions of dollars, add to that the billions required to get the oilfield back into working order and best case scenario would be maybe 7-8 years before any meaningful impact on oil markets. The oil in Venezuela is different than Alaskan oil…it is a completely different product requiring different methods to refine. The price of oil is also a key measure of how oil companies choose to invest, with current prices hovering below $60 per barrel oil companies will likely not see the upside in spending $50-$60 billion dollars or more to revitalize production in a country with a long history of politically unsettled government that has been prone to seizing oil assets to fund their spending levels.
Impact will be complex and take a while to sort out. VZ production cratered when Chavez nationalized the production infrastructure, stealing it from the US / international producers. Since then, product has been shipped to their new BFFs – Cuba, China, anyone else they want to influence in this hemisphere. Russia and Iran don’t need the oil.
VZ oil is pretty heavy and needs specialized refineries. Only ones I know of that can handle it are on the Gulf Coast, interestingly the same refineries that were going to be supplied with Alberta tar sands oil via Keystone XL.
Will the new production impact Alaska? Probably, though not as much as the democrat led clown show in Juneau will as they try to Californicate the producers. Cheers –
Agimarc, did you see where Jeff Hilibrand (Hilcorp) and Bill Armstrong both told President Trump they were ready to start exploring in Venezuela? That’s two of Alaska’s largest oil investors who would be diverting capital south to follow through with that promise to the President.
I’m glad “Painful Truth” mentioned Hilbrand and Armstrong. Their interest in Venezuela and support for Trump was a thinly disguised threat to Alaska that there better be no changes to the way we tax them or the oil that gets produced.