This Oil Major Is Perfectly Positioned to Benefit From Trump's Oil Deal With Venezuela
Key Points
Chevron is the only American oil major with significant operations already in Venezuela.
The company has the capacity to refine large amounts of oil from the country.
- 10 stocks we like better than Chevron ›
A few weeks ago, I wrote an article comparing the stocks of Chevron (NYSE: CVX) and ExxonMobil, saying I'd rather buy Chevron now. Given the events of the last week, I'm doubling down on that.
Last week, President Donald Trump announced a deal with Venezuela to give the U.S. control of more than 65 billion barrels of that country's proven oil reserves, which is about as much as the total proven reserves of the U.S. Venezuelan Interim President Delcy Rodriguez confirmed the 25-year agreement and said it would involve developing 17 oil fields and drawing more than $100 billion of investment.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Why is that good news for Chevron? The company appears to be intricately involved in the plan. News outlets are reporting that Chevron is now negotiating a major deal to expand operations in Venezuela.
Chevron has a big head start in Venezuela
Chevron is the only American oil major that retained operations in Venezuela after the Bolivarian Revolution of 1999, which further nationalized the oil industry and forced many foreign oil companies out of the country. Today, Chevron's operations account for about one-fourth of Venezuelan oil production.
The opportunity for the company is massive. Venezuela has the largest proven crude oil reserves of any nation, about 303 billion barrels. That's even larger than Saudi Arabia's reserves. Basically, it sits on one-fifth of the world's oil.
And the company is on a bit of a roll. It reported net income of $12 billion for the second quarter, nearly 400% higher than the year-ago quarter. It beat Wall Street's earnings estimates by $0.50 a share, at $606.
Chevron is also a major refiner (as is ExxonMobil). Its refining profit soared from $737 million in the second quarter last year to $4.9 billion in the second quarter this year. Oil prices have been highly volatile this year, with increases driven by the Iran war boosting oil companies' revenues.
Image source: Getty Images.
While oil prices are expected to settle once the conflict ends, a global shortage of refining capacity will remain. That's a big positive for Chevron, which has the capacity to refine the heavy, sour crude that Venezuela produces. Chevron CEO Mike Wirth said in January that the company can process an additional 100,000 barrels per day of Venezuelan crude at its Pascagoula, Mississippi, refinery.
Shares of Chevron are up 35% year to date. And the average price target among analysts for CVX shares is $218.29, about 6.4% higher than the current price. Of the 25 analysts who follow the company, 20 rate it either a "strong buy" or a "buy."
Should you buy stock in Chevron right now?
Before you buy stock in Chevron, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!*
Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of August 31, 2026.
Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
Recommended Articles
