The changes in Venezuela pose a "big trouble" for OPEC, and the United States is expected to control "30% of global reserves."

The Trump administration plans to take full control of Venezuela's oil supply, and coupled with the United States' own massive production, this move could reshape the global oil market landscape, playing a disruptive role in an already oversupplied market.

According to a report by The Wall Street Journal on Monday, insiders believe that Trump, who has long advocated for increased oil production with a target price of $50 per barrel, is planning to push for a comprehensive initiative to overhaul Venezuela's oil fields and market its output. This would allow the U.S. to control the output of one of OPEC's founding member countries and potentially have a destructive impact on the global oil market.

Analysts expect that although revitalizing Venezuela's devastated oil industry will require huge investments and a significant amount of time, even a slight increase in production in the short term—and a larger increase in the long term—could exacerbate the global supply-demand imbalance, further driving down oil prices. According to JPMorgan analysts, the combined oil reserves of Guyana, Venezuela, and U.S. producers could allow the U.S. to control about 30% of the world's total reserves.

OPEC member countries now face a difficult choice: whether to support prices by cutting supply or risk damaging revenue and market share—and potentially jeopardizing relations with this unpredictable U.S. president.

Divergence in Outlook for Venezuela's Capacity Recovery

Some OPEC member countries believe that if the Venezuelan government modifies regulations to attract U.S. investors, the country could increase production by 2 million barrels per day within one to three years, up from the current less than 1 million barrels. Gulf OPEC representatives have revealed this expectation.

According to insiders, Saudi Arabia is currently taking a wait-and-see approach. Saudi's assessment is that restoring Venezuela's production will take years, and U.S. companies will need legal frameworks and U.S. government guarantees that may constrain future governments before investing the billions of dollars required to repair Venezuela's devastated infrastructure. Although Venezuela has vast oil reserves, its crude oil is of a heavy, high-sulfur variety, considered low quality and commercially unattractive.

Other Gulf OPEC member countries believe Trump's plan may bring a glimmer of hope.

U.S. Influence Expansion Reshapes Market Power Balance

Even so, the U.S. positioning in Venezuela will complicate OPEC's efforts to manage the market, as the vast reserves will fall under U.S. control and move away from OPEC's orbit, representatives stated.

JPMorgan noted in a recent report: “This shift could give the U.S. greater influence over the oil market, potentially keeping oil prices in historically low ranges, enhancing energy security, and reshaping the power balance in the international energy market.”

OPEC and its allies, including Russia, have been working to formulate strategies to respond to Trump's push for low oil prices. Despite Trump's repeated calls for the organization to increase oil production, its member countries are concerned that prices are already too low. At a meeting on Sunday, OPEC, along with Russia and other producing countries, agreed to suspend any production increase plans for the first three months of this year.

Low Oil Prices Continue to Pressure All Parties

Due to increased global production and concerns about the global economic situation, crude oil prices fell sharply last year. The global oil benchmark, Brent crude, is currently trading at around $63 per barrel, while U.S. benchmark crude hovers around $59 per barrel, both down about one-fifth from a year ago Analysts have been lowering their oil price forecasts for this year in recent weeks, with JP Morgan expecting an average price of $58 for Brent crude oil and $54 for U.S. benchmark crude oil. The bank anticipates even lower prices next year. Saudi Arabia has cut crude oil prices for Asian buyers for the third consecutive month this week.

Regardless of how Venezuela's production changes, analysts unanimously believe that low oil prices will persist, putting pressure on profits and budgets for global producers. A sustained drop below $50 per barrel—many companies' profitability threshold—could severely impact the U.S. shale oil industry, which strongly supports Trump. Many U.S. drillers have ignored the president's calls for increased production, opting instead to adhere to Wall Street's demands for strict capital discipline.

Analysts estimate that Saudi Arabia's cost of extracting crude oil is below $10 per barrel. However, according to Capital Economics, the country needs oil prices above $100 to bring its fiscal deficit down to zero. Riyadh faces significant domestic spending commitments, which are causing the budget deficit of the world's largest oil exporter to widen and borrowing needs to increase. The country's "Vision 2030" plan aims to diversify the economy by stimulating growth in sectors such as tourism, entertainment, and sports