By Prof. Wumi Iledare
Following diverse commentaries since the capture of Venezuelan President, Nicolas Maduro, a petroleum economist of repute, Prof. Wumi Iledare has, in one of his contributions to the global topical issue, highlighted on why Venezuela matters.
Commenting on a publication (not by Valuechain) – titled: Oil Prices Fall as Trump Says Venezuela Will Turn Over Up to 50 Million Barrels, Prof. Iledare said: If the United States effectively regains operational influence over Venezuelan oil production — through sanctions relief, selective licensing, or deeper commercial control — the global oil market will not merely adjust; it will rebalance. History reminds us that oil markets respond less to declarations and more to barrels, incentives, and power.
“Venezuela’s return is not symbolic. With a technically recoverable capacity of roughly 2.0–2.5 million barrels per day in the medium term, the re-entry of Venezuelan supply represents a classic case of supply normalization. In a market already struggling with demand uncertainty and geopolitical overhang, additional barrels tilt the balance toward surplus and renew downward pressure on prices.
“For Nigeria, the concern is not abstract. Venezuelan crude grades — largely heavy and medium — compete directly with Nigerian barrels in the Atlantic Basin, especially in markets where refinery configurations and price sensitivity dominate purchasing decisions. As Venezuelan crude regains market access, competition intensifies, discounts widen, and Nigeria’s crude loses bargaining power,” the Prof added.
He continued: “Beyond barrels, however, lies strategy. US re-engagement with Venezuelan oil is also about strategic leverage. By diversifying supply sources closer to home, the US reduces geopolitical exposure while quietly shaping global price dynamics. Lower oil prices serve domestic economic priorities, even as they strain oil-dependent economies elsewhere.
“The lesson for Nigeria is sobering but familiar. Global oil politics are not moral contests; they are interest-driven reallocations of advantage. Those who rely on proclamations without preparation risk trading long-term resilience for short-term comfort—much like Esau, exchanging future inheritance for immediate relief.
“In this evolving landscape, Nigeria’s challenge is not Venezuela’s recovery or America’s strategy. It is whether Nigeria chooses foresight over complacency—whether it builds buffers, deepens value creation, and hedges exposure—or remains vulnerable to decisions made far beyond its borders.
In oil economics, as in life, outcomes reward strategy, not sentiment.
Wumi Iledare, PhD, PEPE, FNAEE SrFUSAEE, who is also the Chairman, Oil, Gas and Energy Policy (OGEP) Forum, Abuja pointed out that “Nigeria must move away from volume-driven thinking to value-driven oil strategy. It is no longer about how many barrels we produce, but how much net value we retain. Reducing theft, improving reliability, and protecting infrastructure are critical.
“Second, local refining is our first line of defence. Every barrel refined at home is one less barrel exposed to global price shocks. Fully integrating Dangote and modular refineries into national energy planning is essential, with a deliberate shift toward exporting refined products within West Africa.
“Third, gas must become Nigeria’s macroeconomic insurance. Expanding domestic gas for power and industry, alongside LNG and regional gas exports, will reduce over-reliance on crude oil revenues.
Finally, he stated, further, in a world of intense capital competition, “policy consistency and regulatory credibility matter. Investors will only commit capital where rules are clear, stable, and enforced without discretion.
Bottom line: “US engagement in Venezuela is not Nigeria’s biggest problem. Nigeria’s vulnerability is. Nigeria cannot control global oil politics, but we can control how exposed and prepared we are”.