Venezuela, Brazil, Guyana, and Argentina: an emerging new oil-exporting bloc

Even if all hostilities were to cease today, it would take months for Middle Eastern natural gas and oil production to fully recover from the U.S.-Israel-Iran conflict. For some key projects—such as Qatar’s North Field, a vital node in the global liquefied natural gas (LNG) supply chain—recovery could take years. According to recent comments by Philip Mshelbila, Secretary-General of the Gas Exporting Countries Forum (GECF), regarding natural gas, the Iran war—following Russia’s invasion of Ukraine—‘has triggered a sharp price surge, returning markets to the volatility seen in 2022.’ He stated that this has reshaped supply-demand dynamics: pre-war forecasts had projected a global gas market oversupply by 2026. Yet, he concluded, it remains unclear whether the U.S.-Israel-Iran conflict will merely delay that oversupply—or prevent it altogether. Meanwhile, industry analysts estimate that, once hostilities end, Middle Eastern oil producers may require six months to one year to fully restore output, given widespread damage to oilfields and pipelines, shipping disruptions, and workforce losses due to site closures and evacuations. Of course, in the zero-sum game of global energy, every loser creates a winner—and the United States has positioned itself as the principal beneficiary in both oil and LNG sectors, stepping in to fill global supply gaps. Washington is also leveraging this opportunity to strengthen loyalty among petroleum and natural gas producers in South America—countries it considers within its own sphere of influence. At the top of this list stands Venezuela—a development unsurprising given that, on January 3, Washington seamlessly replaced long-serving President Nicolás Maduro with acting President (and concurrently Oil Minister and OPEC representative) Delcy Rodríguez. Since then, the country has taken steps to advance a U.S.-led rapid revival, transforming this nation—home to the world’s largest proven oil reserves yet producing only a fraction thereof—into a global petroleum and natural gas powerhouse, and a key geopolitical and energy asset for Washington. Although state control intensified under former presidents Hugo Chávez and Maduro, delivering adverse effects, Venezuela still holds approximately 303 billion barrels of crude oil—roughly 17% of the global total. Most Venezuelan oil originates from the Orinoco Belt and consists of ultra-heavy crude, which demands more advanced technology and expertise to process than light crude—but is cheaper to extract and often yields higher refining margins. The real challenges lie not in extraction, but in transporting, upgrading, and refining this crude; the true bottlenecks are crumbling infrastructure, chronic diluent shortages, damaged upgrading equipment, sanctions, and the hollowing-out of Petróleos de Venezuela, S.A. (PDVSA). If these constraints are resolved, Venezuela could swiftly rebound to its 2008 output level of roughly 3 million barrels per day. Currently, U.S. energy supermajor Chevron has solidified its position in Venezuela’s oil sector through an asset swap, raising its stake in the joint venture Petroindependencia to 49%. This venture operates the Carabobo 3 project in the Orinoco Heavy Oil Belt.

Repsol doubles second-quarter earnings amid rising oil prices

Spanish energy giant Repsol more than doubled its net income in the second quarter, as higher oil prices offset declines in natural gas production and weak refining margins. Repsol reported net income of $713 million (€657 million) for the second quarter of this year—more than double the $334 million (€308 million) recorded in the same period last year. The company is expanding its renewable energy assets and power generation capacity, yet continues to derive most of its earnings from upstream operations. Compared with the prior-year period, upstream performance benefited from higher oil prices in both the second quarter and the first half of this year. However, lower realized natural gas volumes—driven by falling gas prices—and declining refining margins weighed on the Spanish-headquartered energy group’s downstream business. In commenting on its second-quarter and first-half results, Repsol stated: ‘The first half of 2024 was delivered against a backdrop of rising crude oil prices, subdued natural gas and electricity prices, slowing refining margins, and extremely low margins in the chemicals business.’

Spain's Repsol Hikes Buybacks, Guidance as Q3 Profit Soars Above Expectations

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Spain's Repsol reported a surge in Q3 profits driven by high energy prices and refining margins, prompting a €950 million share buyback and increased cash flow guidance. Adjusted net profit reached €2.71 billion, significantly beating analyst expectations.

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