Venezuela's oil industry is set for a gradual recovery rather than a rapid production surge, even as Chevron (CVX) and Eni (E) commit billions of dollars to revive output in the OPEC member, RBC Capital Markets strategists said in a note on Thursday.
Chevron plans to invest about $7 billion over the next five years through its Venezuelan joint ventures, including development of two fields in the Orinoco Belt. The investment is intended to help the US major double its Venezuelan crude production to about 600,000 barrels per day.
Italian energy major Eni is also preparing to begin drilling in the Junin 5 block as soon as this week, marking another significant step in the return of foreign capital to Venezuela's oil sector.
The commitments are among the largest foreign investments in Venezuela's energy industry in years and align with the Trump administration's push to increase the country's crude production and improve access to its resources.
However, RBC analysts said the scale of the challenge means the investments are unlikely to translate into a substantial increase in national production in the near term.
Venezuela would need tens of billions of dollars in investment over a decade to return to production levels reached around the turn of the century. The analysts said years of mismanagement at state oil firm PDVSA and deterioration of the country's oil infrastructure remain major obstacles.
RBC said that Chevron and Eni have an advantage over potential newcomers because both maintained operations in Venezuela during the latter years of the Maduro government, thanks to US sanctions waivers.
However, RBC noted other major oil companies that once had a significant presence in the country may remain reluctant to return, amid concerns over political stability and the recovery of capital and debt.
RBC expects Venezuelan crude production to increase by about 110,000 b/d in 2026 and another 245,000 b/d in 2027, suggesting a modest upward trajectory rather than an immediate supply surge.
Meanwhile, crude and commodity shipping via the Strait of Hormuz is increasingly moving out of sight as vessels respond to security risks in the region.
RBC said that about 71% of commodity-linked vessels transiting the strait in August either switched off their automatic identification systems or otherwise used unknown routes.
The consultancy said that compares with about 63% in July and about 45% during the period covered by the memorandum of understanding.
The increase in so-called dark transits comes as Iran continues to threaten vessels that violate its restrictions, while shuttle operations may also have contributed to the shift toward less visible shipping patterns.
Traffic patterns also shifted in August, with the Iranian route accounting for a larger share of traffic month-on-month, while the portions using Omani and International Maritime Organization routes declined.
RBC said that the growing use of dark transits underscores how security concerns are reshaping energy flows through the Strait of Hormuz, even as shipping activity continues.
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