Key Stats for Chevron Stock
- Price Change for Chevron stock: 5%
- $CVX Share Price as of Jan. 5: $164
- 52-Week High: $169
- $CVX Stock Price Target: $172
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What Happened?
Chevron (CVX) stock surged over 5% on Monday after President Donald Trump’s administration conducted a surprise military operation in Venezuela over the weekend, capturing Venezuelan President Nicolas Maduro and his wife.
The dramatic intervention sent shockwaves through global markets and sparked a rally across the entire U.S. oil sector.
Other oil majors also jumped, with Exxon Mobil up 3%, ConocoPhillips advancing 5.5%, and oilfield services giant SLB climbing 8.5%. The moves came after Trump announced that the White House would “run” Venezuela until a stable transition could take place.
Venezuela has the largest proven crude oil reserves in the world at 303 billion barrels, representing roughly 17% of global oil reserves, according to the U.S. Energy Information Administration.
As a founding member of OPEC, the country’s energy sector has massive strategic importance despite years of mismanagement and underinvestment.
Trump made clear that rebuilding Venezuela’s energy infrastructure is now a core objective. “We’re going to have our very large United States oil companies go in, spend billions of dollars, fix the badly broken infrastructure,” Trump said in a press conference from Mar-a-Lago. “Let’s start making money for the country.”
Oil prices edged slightly higher on the news. International benchmark Brent crude futures rose 0.5% to $61.03 per barrel, while U.S. West Texas Intermediate futures climbed 0.6% to $57.64.
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What the Market Is Telling Us About CVX Stock
Wall Street analysts believe Chevron stock is best positioned among U.S. oil majors to benefit from Venezuela’s reconstruction. Allen Good, director of equity research at Morningstar, highlighted Chevron’s significant existing presence in the country as a key advantage.
Chevron is the only major U.S. oil company currently operating in Venezuela through joint ventures with state-owned Petróleos de Venezuela. Those partnerships account for about 23% of Venezuela’s current output, according to JPMorgan, as it operates under a special license issued by the U.S. government.
“The company would be in an advantaged position to potentially scale future output as they have significant oil resources in place through their JVs and have been a key developer of the country’s energy infrastructure,” JPMorgan analyst Arun Jayaram told clients.
Exxon Mobil and ConocoPhillips left Venezuela after former President Hugo Chavez nationalized the industry and seized their assets in 2007. Trump’s intervention could allow these companies to re-enter the country, though the path forward remains complicated.
Venezuela’s oil production has collapsed from a peak of 3.5 million barrels per day in the 1990s to just 1.1 million bpd today. Consulting firm Rystad Energy estimates it would take $53 billion in investment over 15 years to maintain current production levels.
Reaching 3 million bpd by 2040 would require more than triple that amount, about $183 billion in total capital expenditures.
“Venezuela’s oil industry will require tens of billions in investment to meaningfully lift production,” Good warned. “Oil companies will need to be cautious about deploying capital until there is greater regulatory and contractual certainty.”
Venezuela lacks stable electricity supplies, reliable food and fuel distribution, and basic law and order, according to Neil Atkinson, an independent energy analyst and former London-based employee of Venezuela’s state-owned oil company PDVSA.
Trump initially declared the U.S. would run Venezuela, but Secretary of State Marco Rubio appeared to backtrack, saying the U.S. would use leverage to pressure Caracas to meet American demands.
Vice President Delcy Rodriguez assumed power in Venezuela, first pledging to defend the country’s resources, then later saying Caracas sought to cooperate with the U.S.
U.S. oil majors need certainty about who’s in charge and whether the legal and fiscal regime will last long term, since energy investments are typically 30-year projects. A major risk is whether Venezuela could return to a regime similar to Maduro’s and nationalize oil assets again.
The other question is whether it makes financial sense to invest tens of billions when oil prices remain relatively low and the global supply is already abundant.
Despite all the challenges and uncertainties, Chevron stock rallied strongly on the news, reflecting investor optimism that the company’s existing foothold gives it a head start in what could eventually become a major growth opportunity.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
