Trump’s Venezuela Oil Takeover Threatens Nigeria’s $2.9 Billion U.S. Export Market
Nigeria is staring at the potential loss of nearly $3 billion in annual crude oil revenues as President Donald Trump’s military intervention in Venezuela dramatically reshapes America’s energy supply landscape. The West African nation, which exported approximately 38 million barrels valued at $2.86 billion to U.S. refineries between January and September last year, now faces direct competition from Venezuelan crude following the removal of former President Nicolás Maduro.
Trump announced that Venezuela would deliver between 30 and 50 million barrels of oil to the United States, with the president declaring on Truth Social that he would personally control the proceeds to benefit both Venezuelan and American citizens. This bold move has sent shockwaves through global oil trading circles and raised alarm bells in Lagos.
Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies, described the development as a direct threat to Nigeria’s position in the U.S. market. “Venezuelan crude, despite being heavier and more sulfurous, competes directly with Nigerian grades for Gulf Coast refinery capacity,” Mohammed warned.
Latest shipping data reveal significant volatility in Nigeria’s export patterns, with monthly volumes ranging from a low of 1.8 million barrels in February to a peak of 6.9 million barrels in June. The inconsistency underscores the vulnerability that Trump’s Venezuela initiative could exploit, particularly as Nigerian producers struggle with pipeline vandalism, aging infrastructure, and chronic underinvestment.
The geopolitical implications extend far beyond immediate supply concerns. Trump has reportedly demanded that Venezuela’s interim authorities, led by newly sworn-in President Delcy Rodríguez, grant the United States exclusive partnership rights on oil production and sever economic ties with China, Russia, Iran, and Cuba. China’s foreign ministry spokesperson Mao Ning condemned the action as “a typical act of bullying” and “a serious violation of international law.”
If Venezuela redirects barrels previously destined for Asian markets, Chinese refiners may increasingly turn to West African suppliers, potentially offsetting some of Nigeria’s U.S. losses. Chioma Okafor, a petroleum economist at the University of Lagos, questioned whether increased Chinese demand could compensate for American market losses, noting that Chinese buyers typically negotiate harder on price with less favorable payment terms.
Energy analysts remain skeptical about the timeline for meaningful increases in Venezuelan production. Despite possessing the world’s largest proven oil reserves at an estimated 303 billion barrels, decades of underinvestment, mismanagement, and sanctions have crippled Venezuela’s production capacity. Trump claimed U.S. oil companies could have Venezuela’s industry up and running within 18 months, though experts suggest restoration could require tens of billions of dollars and potentially a decade.
Currently, only Chevron maintains operations in Venezuela among major U.S. oil companies. ConocoPhillips, which was awarded an $8.7 billion arbitration judgment against Venezuela in 2019 for asset expropriations, said speculation about future investments would be premature. Nigerian officials have remained notably silent on Trump’s announcement, though industry insiders suggest Abuja is monitoring developments closely.
The competitive pressure may force Nigeria to offer deeper discounts to maintain market access, further squeezing government revenues at a time when the country faces mounting debt obligations and infrastructure needs. A former senior NNPC official, speaking on condition of anonymity, warned that even a 30 percent contraction in the U.S. market would mean nearly a billion dollars that needs to be replaced elsewhere.
Source: businessday.ng
