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The bullish The case for oil stocks received a significant boost earlier this month when US forces captured now-former Venezuelan President Nicolas Maduro, raising hopes that the oilThe rich country will finally be open to Western oil majors.
account ConocoPhillips (NYSE: COP) among domestic oil stocks in recovery mode to start 2026. January is not over yet, but this value is higher by more than 8%. How much, if any, of this movement is attributable to Venezuela is up for debate.
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Yes, there has been a not-so-subtle hint from President Trump to US oil giants, including ConocoPhillips, that they be ready to invest in the South American country. Maybe they will. Maybe they won’t, but the point is that investors should be careful about considering this stock a Venezuelan play, and that’s not an indictment of the company.
Investors who have been actively following the situation in Venezuela probably know this Chevron (NYSE: CVX) it’s the only domestic oil company operating there, but we’re talking about ConocoPhillips here.
Like a rival ExxonMobil meConoco was banished from the country in 2007 when then-President Hugo Chávez nationalized the country’s energy industry. Thus, while accessing any member of the Organization of Petroleum Exporting Countries (OPEC) Coveted, history alone might give Conoco pause for a hasty return to Venezuela. Then there is the question of the derivatives of this story.
When accounting for interest, Conoco has legal claims against Venezuela totaling $12 billion. Exxon’s sum is $20 billion, but that company also hopes to recoup $12 billion. At $12 billion each, Conoco and Exxon are two of Venezuela’s biggest non-sovereign creditors. This is not a dumb change. In fact, $12 billion is almost 10% of Conoco’s market capitalization from January 28.
There is speculation that Exxon and Conoco would tie future investments in Venezuela to the recovery of those debts, but the White House sees this as a long-term issue, not something to deal with in the short term. In other words, the Trump administration wants US oil companies to invest in Venezuela, but it won’t play debt collectors to make it happen.
Investors with experience in the oil patch know that this segment is ripe idiosyncratic riskor issues related to a specific industry. It is difficult, perhaps impossible, to eliminate all the idiosyncratic risks in the oil industry, but producers can take steps to minimize the broader turbulence. Conoco does, and not at the expense of shareholders, as the stock outperformed Chevron over the past five years.
