AUSTIN, Texas – Following the ousting of former Venezuelan President Nicolás Maduro, President Trump has expressed intentions to revitalize the oil sector in Venezuela. This proposal has sparked discussions about potential implications for gas prices and the impact on Texas’s oil industry.
Despite the potential for changes in Venezuela, experts suggest that a significant increase in gas prices or a downturn in Texas’s oil industry is unlikely to manifest in 2026. Current oil prices are relatively low, and analysts point to the possibility of the lowest gas prices since the pandemic.
Dale Owens, an energy analyst, shared a sense of cautious optimism regarding price stability. He noted, “Things change so drastically nowadays. I mean, look what’s happening with the government, so anything can affect the price. But right now I’m really happy that it’s stable.”
Ed Hirs, an Energy Fellow at the University of Houston, highlighted several factors contributing to the current stabilization of gas prices, which existed prior to the leadership change in Venezuela. He emphasized the significance of the U.S. administration’s requests to OPEC nations to maintain production levels, which not only aims to mitigate the Russian economy’s impact but also aligns with upcoming midterm elections.
The price of oil per barrel is anticipated to rise slightly due to the uncertainties surrounding Venezuela. However, Texas crude oil production data from December indicates stability, albeit with a decrease in drilling permits for 2025 compared to 2024.
Hirs elaborated on the challenges facing the Texas oil industry, noting that when President Trump assumed office, oil prices were around $80 per barrel, whereas they currently hover below $60. He explained that the costs associated with drilling have increased due to tariffs on imported steel, creating a squeeze on West Texas producers who are facing lower revenues and higher operational costs.
With state lawmakers set to reconvene in Austin in 2027, the financial implications of reduced oil revenues are pressing. Hirs warned that a reevaluation of the budget is necessary, as lower oil revenues will affect tax receipts for the state, counties, and cities dependent on these funds.
Concerns also linger regarding whether Texas refineries will benefit from a revitalized Venezuelan oil sector. While several refineries in Texas and Louisiana are equipped to process heavy crude from Venezuela, recent closures, such as Lyondell’s historic refinery in Houston, suggest that the economic viability of such operations is in question.
In a more optimistic view, stock prices for several oil companies saw an uptick, with Chevron experiencing a notable surge due to its operations in Venezuela. Other energy-related companies, including Exxon and industry suppliers like Baker-Hughes and Halliburton, also reported gains.
However, Hirs cautioned that the administration’s plans may be overly optimistic. Historical precedents, such as attempts to rebuild oil infrastructure in the aftermath of the Soviet Union’s collapse and the ongoing challenges in Iraq and Libya, suggest that the path to revitalization may be fraught with difficulties.
