The first days of 2026 have hit Russia hard in the global oil market. Here’s a look at what’s happening in Venezuela, how to tackle Russia’s shadow fleet, and how oil sanctions could actually work.
Might makes the rules
Ukrainians know all too well the reality behind what’s known as international law. The true rules of the global order are not set by treaties, but by the national interests of countries with the power — and the will — to enforce them, whether through diplomacy, military action, or other means.
Support does not come because it is morally or legally right. Ukraine has been fortunate that, at this moment in history, a number of states see a Moscow victory in the Russian war against Ukraine as contrary to their own national interests.
Venezuela tells a different story. Its adversary was too strong, and its allies were either unable or unwilling to act. The bold operation by the Delta unit in Caracas sends a clear message: respect the powerful, or face the consequences of their wrath.
At the same time, the United States is advancing a wide range of foreign policy goals, from asserting control over global oil markets to countering China and its allies, including Russia and Iran. For Ukraine, the most significant impact is on Moscow’s energy prospects, as Russia already struggles to secure oil revenues amid sanctions and ongoing infrastructure pressures.
Pushing Russia and China out of Venezuela
Venezuela is the country with the largest proven oil reserves in the world — more than 300 billion barrels, almost four times Russia’s reserves. By all logic, Venezuelans should be living no worse than citizens of Saudi Arabia or the United Arab Emirates.
Indeed, not so long ago, Venezuela was the wealthiest country in Latin America. But in 1999 a story all too familiar to Ukrainians unfolded: socialists led by Hugo Chávez came to power, and under their government the country’s economy was effectively destroyed. GDP shrank by 75–80%, the national currency lost 99.99% of its value, and more than 90% of the population fell below the poverty line.
The main cause of the catastrophe was the state’s inability to effectively manage a nationalised oil industry. Oil production collapsed from more than 3 million barrels a day in the early 2000s to under 500,000 barrels a day by the mid-2010s. In 2024–2025, Venezuela was producing just over 900,000 barrels a day — less than 1% of global output — an astonishingly low figure for a country with the world’s largest reserves.
US interest in Venezuelan oil is clear, reflected in statements from American officials. Vice President J.D. Vance has said the United States will “control the country’s energy resources,” while Energy Secretary Chris Wright stated that “the US will sell Venezuelan oil.” On 8 January, Chevron reportedly was already working with the new government to export 30–50 million barrels of sanctioned oil.
In a conversation with The Ukrainian Week, Mykhailo Honchar, an expert in international energy and security relations and president of the Strategy XXI Globalistics Centre, explained that the US goal is to push Russia and China out of Venezuela:
“They are outsiders in America’s backyard, as Trump’s team sees it. But oil reserves will not automatically become US property — there will be legal disputes, possibly involving the Chinese and the Russians. Most likely, however, this will become a subject of political bargaining.”
A rapid increase in production should not be expected. Experts at Rystad Energy note that Venezuela’s oil infrastructure is in poor condition. Around $183 billion in investment would be needed to return output to 3 million barrels a day by 2040. If investment began immediately, production could rise by 300,000–350,000 barrels a day within two to three years. By comparison, Russia currently produces more than 10 million barrels a day.
Russia takes a hit to its global ambitions
Despite the harsh realities of the oil economy, US actions deliver a sharp blow to the ambitions of both Russia and China. China is currently the largest consumer of Venezuelan oil, which accounts for around 4–5% of its total oil consumption. That “black gold” may now bypass the Pacific and head instead to the shores of Texas. For China, it is an unwelcome but not catastrophic loss. Beijing had also extended more than $100 billion in loans to the Chávez and Maduro governments, to be repaid in oil — funds that now seem unlikely to be recovered.
Russia faces a very different challenge. For Moscow, developments in Venezuela threaten not only its geopolitical ambitions but also its budget. Russian oligarch Oleg Deripaska has written on his Telegram channel that “more than half of the world’s oil reserves could come under US control” and that “they plan to ensure that oil prices do not rise above $50 a barrel.” At the start of 2026, Urals crude was priced at roughly $50 a barrel, though it is often sold at a discount to official benchmarks, while the Russian federal budget for 2026 assumes a price of $59.
“It should be borne in mind that oil in the ground and oil on the market are two very different things. But formally, the largest volumes of Venezuela’s oil reserves are controlled by Russian and Chinese companies; the Americans have relatively little.”
The drop in oil prices to $50 and below is largely driven by Saudi Arabia’s policy. As early as September 2024 — ahead of the US presidential election — Riyadh outlined a plan to expand its market share. Donald Trump’s “drill, baby, drill” approach has also played a role, Mykhailo Honchar told The Ukrainian Week.
The seriousness of US intentions is highlighted by its actions against vessels in Russia’s shadow fleet. By the time of publication, the United States had already seized five such ships, ignoring the presence of armed escorts.
Moscow faced another setback with Iraq’s decision to nationalise Lukoil’s oil production assets. Baghdad said the move was aimed at avoiding US sanctions. The decision affects the West Qurna field, which produces 465,000–480,000 barrels a day — around 0.5% of global output — and was Lukoil’s largest foreign asset.
Honchar says any reduction in Russia’s share of the oil market is likely to be offset by additional output from OPEC+ countries. “Primarily, this concerns Saudi Arabia, which can boost exports by 2–3 million barrels a day. There are also the United Arab Emirates, Iraq, and US companies operating in Kazakhstan. According to International Energy Agency forecasts, from early 2026 around 4 million barrels a day will be added to the market, keeping downward pressure on prices despite occasional disruptions — for example, in Iran,” he said.
Will this trigger a full market crash? That will become clear after the first quarter. In any case, the downward trend is expected to continue.
Russia will continue to try to maintain — and even increase — crude oil exports, as shipments of refined petroleum products have fallen following Ukrainian strikes on several oil-refining facilities.
Sanctions only bite if they’re enforced
Honchar said any drop in Russia’s share of the oil market is likely to be offset by extra output from OPEC+ countries. “This mainly involves Saudi Arabia, which could increase exports by 2–3 million barrels a day. The United Arab Emirates, Iraq, and US companies in Kazakhstan could also add volumes. According to International Energy Agency forecasts, around 4 million barrels a day will enter the market from early 2026, keeping downward pressure on prices despite occasional disruptions, such as in Iran,” he said.
Whether this will trigger a full market crash will become clear after the first quarter. In any case, the downward trend is expected to continue.
Russia will continue to try to maintain — and even raise — crude oil exports, as shipments of refined petroleum products have fallen following Ukrainian strikes on several oil-refining facilities.
“The United States is beginning to treat the crews of these tankers as criminals for helping to evade sanctions. If a tanker is listed as part of the shadow fleet, it can be tracked using maritime traffic‑monitoring systems. If the crew switches off transponders, that constitutes a criminal offence. Europeans should act with the same firmness — simply restrict tanker traffic through the Baltic Sea, from where around 60% of Russia’s oil and petroleum product exports reach global markets. The justification is straightforward: these vessels fail to meet technical standards and pose enormous environmental risks.”
Honchar insisted that Ukraine’s Defence Forces should continue operations against sanctioned tankers in the Black and Mediterranean seas. “Sinking a modern tanker is impossible — and unnecessary. It is more effective to damage empty tankers, targeting their propulsion systems or hulls. That creates a cascade of problems for shipowners, including higher freight rates and insurance costs. All of this reduces the revenue flowing into Russia’s war budget.”
As of early 2026, Russian oil exports are falling both in volume and revenue. A mix of sanctions, strikes on infrastructure, and declining prices has pushed Moscow’s oil income to its lowest level since the start of the full-scale war. In the four weeks ending 4 January 2026, Russian oil export revenues dropped to $960 million per week, down 10% from the previous week — the lowest level recorded at least since February 2022.
Developments in Venezuela have only reinforced this bleak trend for Moscow in the energy market. Despite rhetoric that often irritates Ukrainians, actions by the Trump administration are delivering a sharp blow to Kremlin ambitions. Crucially, the United States is showing how the shadow fleet — the main lifeline of Russia’s war machine — should be managed. With most shipments passing through the Baltic Sea, effectively an internal lake of the EU and NATO, Europe’s partners have a clear opportunity to deny Russia billions in revenue.
