Analysis of the Impact of Geopolitical Factors on Investment Decisions in the Energy Sector

I will now provide you with a comprehensive in-depth analysis report on

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On January 3, 2026, U.S. military operations led to the detention of Venezuelan President Nicolás Maduro, after which the Trump administration announced that the U.S. would “reclaim” Venezuela’s oil assets[1]. On January 6, the U.S. and Venezuela reached a preliminary agreement under which Venezuela will export crude oil worth up to

(approximately 30-50 million barrels) to the U.S. These crude oil shipments were previously stranded and unable to be transported due to sanctions[2].

Item	Details
Export Scale	$2 billion (approximately 30-50 million barrels)
Executing Party	U.S. Secretary of Energy Chris Wright
Current Operator	Chevron is the only authorized enterprise to export crude oil from Venezuela
Crude Oil Source	Shipments originally bound for China will be redirected to the U.S.
Fund Arrangement	Trump stated that the funds will be controlled by the U.S. side

The market’s reaction to the news showed

:

• WTI Crude Oil Price
  : Fell by more than
  1.5%
  after the announcement [2]
• U.S. Gulf Coast Heavy Crude Price Spread
  : Dropped by approximately
  50 cents per barrel
  [2]
• S&P 500 Energy Index (XOI)
  : Plunged
  1.40%
  on January 6, 2026, making it the worst-performing sector of the day [3]
• Share Prices of Major Oil and Gas Companies
  :
  • Chevron (CVX) plummeted
    4.46%
    on the day [4]
  • ExxonMobil (XOM) fell
    3.39%
    on the day [5]

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Venezuela holds the world’s largest proven oil reserves (accounting for approximately 30% of global reserves), but under the impact of sanctions, its crude oil production has plummeted from

in 2015 to in recent years [6][7]. The reaching of this agreement may bring a “rebirth” opportunity for Venezuela’s oil industry, but it also signifies a major adjustment on the global crude oil supply side.

Venezuelan crude re-enters the market → Global supply increases → Oil prices face downward pressure → US oil and gas companies' revenues decline

According to analyses by institutions such as Goldman Sachs, Venezuelan crude oil is primarily

, which has special appeal to refineries along the U.S. Gulf Coast. However, the increase in supply will directly lead to:

1. Short-Term Price Pressure
   : U.S. WTI oil prices have fallen to the
   $55-60 range
   [8]
2. Narrowing Price Spreads
   : The price spread between heavy crude and light crude will continue to narrow
3. Uncertainty Regarding OPEC+ Policies
   : Oil-producing countries such as Saudi Arabia may adjust their production cut strategies

Scenario	Estimated New Supply	Impact on Oil Prices
Conservative Scenario	100,000-150,000 barrels per day	-$1-2 per barrel
Base Case Scenario	200,000-300,000 barrels per day	-$2-4 per barrel
Optimistic Scenario	Over 500,000 barrels per day	-$4-6 per barrel

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Chevron plays a

in the Venezuelan situation:

1. As a Beneficiary
   :
   • Chevron is currently the
     only
     enterprise authorized by the U.S. Department of the Treasury’s OFAC to export crude oil from Venezuela [2]
   • Its daily export volume is approximately 100,000-150,000 barrels, accounting for
     100%
     of Venezuela’s crude oil exports to the U.S.
   • The company holds significant upstream assets and has long-term operating experience in Venezuela

2. As a Victim
   :
   • As a U.S. listed company, its share price has been dragged down by the overall decline of the oil and gas sector
   • Its Q3 FY2025 financial report shows that the company’s revenue has year-over-year declined, and net profit is under pressure [4]
   • Analysts expect its earnings to continue to decline in 2025-2026 [8]

Indicator	Value	Industry Comparison
Market Capitalization	$313 billion	Medium-Sized
P/E	22.07x	Higher than XOM (17.51x)
ROE	8.01%	Lower than XOM (11.42%)
Current Share Price	$156.54	YTD +0.41%
Analyst Consensus	Buy	Target Price $170.50

ExxonMobil’s risk exposure in Venezuela is

for the following reasons:

1. Strategic Focus Shift
   : The company has significantly reduced its operations in Venezuela and shifted its focus to new projects in Guyana, Brazil, etc.
2. Business Structure Advantage
   : It has a higher proportion of downstream and LNG businesses, resulting in lower sensitivity to upstream oil price fluctuations
3. Stronger Financial Resilience
   : With a P/E ratio of only 17.51x and ROE of 11.42%, earnings forecasts show that its 2026 EPS will increase by over 2% year-over-year [5]

Company	2025 EPS Forecast	2026 EPS Forecast	Year-Over-Year Change
Chevron	Decline	Further Decline	Negative
ExxonMobil	$6.92 (-11.2%)	$7.06 (+2%)	Moderate Growth

Based on the sensitivity model of oil prices to EBITDA, the impact on earnings under different oil price scenarios is as follows:

• Bullish Scenario ($70-80 per barrel)
  : EBITDA increases by
  +15%
  year-over-year
• Base Case Scenario ($60-70 per barrel)
  : Remains stable
• Bearish Scenario ($50-60 per barrel)
  : EBITDA decreases by
  -20%

Current oil prices are in the

, and the on U.S. oil and gas companies has already begun to emerge.

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The impact of geopolitical factors on energy investment decisions can be summarized into the following

:

Risk Dimension	Weight	Risk Rating	Explanation
Supply Security	25%	4.2/5	The Venezuelan situation has increased supply chain uncertainty
Price Volatility	20%	3.8/5	Immediate price reactions triggered by geopolitical events
Regulatory Policy Risk	15%	4.5/5	Frequent adjustments to OFAC sanctions policies
Resource Access Channels	25%	3.5/5	Strategic layout for emerging resources
Cost of Capital	15%	3.0/5	Sanction-related uncertainty pushes up risk premiums

Based on risk-return trade-offs, investment strategy recommendations for different time horizons:

• JPMorgan
  : Estimates that the U.S. can gain access to
  30% of global oil reserves
  by controlling Venezuela [9]
• “Big Short” Investor Michael Burry
  : Believes that the collapse of the Maduro regime will weaken Russia’s global status [9]
• Analyst Consensus
  : Maintains a “Hold” rating on CVX (Zacks Rank #3), with valuation fully reflecting current operations [8]
• Citigroup, Morgan Stanley
  : Maintain a cautious stance on the energy sector as a whole, worrying about sustained downward pressure on oil prices

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Company Type	Recommended Rating	Core Logic
Upstream-Dominant Enterprises	Reduce Holdings	Downward pressure on oil prices directly erodes profits
Integrated Giants (XOM)	Hold	Business diversification provides a buffer
Downstream Refining Enterprises	Watch	Increased heavy crude supply may reduce raw material costs
Oilfield Service Companies (SLB)	Cautious	Capital expenditures may contract

1. Policy Risk
   : Frequent adjustments to sanctions policies may trigger sharp market volatility
2. Implementation Risk
   : The specific implementation timeline for Venezuelan crude oil exports remains uncertain
3. Geopolitical Risk
   : Potential deterioration of U.S.-Venezuela relations
4. Price Risk
   : OPEC+ may adopt production cut strategies to support oil prices
5. Credit Risk
   : PDVSA is excluded from the Society for Worldwide Interbank Financial Telecommunication (SWIFT)

• Short-Term (1-3 Months)
  : Reduce exposure to the energy sector and wait for policy clarity
• Medium-Term (3-12 Months)
  : Focus on oil and gas companies with low-cost assets
• Long-Term (1-3 Years)
  : Strategically allocate to energy enterprises leading in the transition to new energy

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The change in Venezuelan crude oil supply is a

. The following core conclusions can be drawn from this event:

1. Immediate Impacts Have Emerged
   : Oil prices fell by over 1%, the energy sector became the worst-performing sector of the day, and CVX and XOM shares plummeted 4.46% and 3.39% respectively.

2. Far-Reaching Structural Impacts
   : If Venezuelan crude oil enters the market on a large scale, it may keep oil prices suppressed in the $55-60 range for the long term, putting sustained pressure on the profit outlook of U.S. oil and gas companies.

3. Increasing Divergence Among Companies
   : Chevron has become a “double-edged sword” due to its unique position in Venezuela—it is both the only beneficiary and dragged down by the sector’s decline; ExxonMobil has stronger risk resistance thanks to its business diversification.

4. Cautious Investment Decisions Are Needed
   : Geopolitical risks have increased investment uncertainty, and it is recommended that investors maintain a cautious stance in their energy sector allocations, focusing on companies with low-cost assets and diversified businesses.

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[1] Columbia University Center on Global Energy Policy - “Q&A on US Actions in Venezuela” (https://www.energypolicy.columbia.edu/qa-on-us-actions-in-venezuela/)

[2] Reuters - “Venezuela to export $2 billion worth of oil to US in deal with Trump administration” (https://www.reuters.com/business/energy/venezuela-us-talks-export-venezuelan-oil-us-sources-say-2026-01-06/)

[3] Gilin API Data - Performance of S&P 500 Energy Index (XOI)

[4] Gilin API Data - Company Profile of Chevron Corporation (CVX)

[5] Gilin API Data - Company Profile of Exxon Mobil Corporation (XOM)

[6] CNN - “Trump said Venezuela stole America’s oil. Here’s what really happened” (https://www.cnn.com/2026/01/05/business/oil-venezuela-trump)

[7] Holland & Knight - “OFAC Sanctions: Top 5 Trends for 2026” (https://www.hklaw.com/en/insights/publications/2026/01/ofac-sanctions-top-5-trends-for-2026)

[8] Nasdaq - “Chevron Stock Outlook: Can CVX Hold Up With Oil Under $60?” (https://www.nasdaq.com/articles/chevron-stock-outlook-can-cvx-hold-oil-under-60)

[9] Fortune - “Energy stocks rip as JP Morgan estimates the U.S. could hold 30% of all the world’s oil” (https://fortune.com/2026/01/05/how-much-oil-will-us-have-with-venezuela-30-percent-jpmorgan/)

[10] ABC News - “Oil stocks sharply higher after US action in Venezuela” (https://abcnews.go.com/Business/wireStory/oil-stocks-sharply-higher-after-us-action-venezuela-128911586)