When oil routes tighten, Venezuela returns to the energy map

Tensions in key oil corridors such as the Strait of Hormuz have once again exposed how fragile the global energy supply can be. In that context, Venezuela’s vast crude reserves are reentering the conversation.

Straits are narrow waterways that connect seas or oceans and, because of their geography, often become unavoidable routes for international shipping. Despite their relatively small size, these passages carry vessels transporting oil, gas, food, and manufactured goods between continents. Their strategic importance is considerable. When one of these routes is disrupted by conflict, geopolitical tensions, or accidents, maritime journeys grow longer and transportation costs rise. The effects quickly ripple through energy markets and the global economy.

The Strait of Hormuz, a critical energy chokepoint

One of the most sensitive points in the global energy system is the Strait of Hormuz, located between Iran and Oman. This passage links the Persian Gulf to the Indian Ocean and serves as the main maritime outlet for oil produced across the region.

According to Encyclopaedia Britannica, roughly one fifth of the world’s oil consumption passes through the Strait of Hormuz. As the encyclopedia notes, “more than 20 percent of global oil and liquefied natural gas exports pass through the strait, which serves as the primary route for petroleum exported from Iran, Iraq, Kuwait, Qatar, and the United Arab Emirates, although the latter can divert much of its exports through its emirate of Fujairah on the Gulf of Oman.”

The Persian Gulf hosts hundreds of offshore platforms and natural gas fields that supply markets across Asia, Europe, and the Americas. For that reason, any disruption in this maritime corridor immediately raises concerns in international energy markets.

When maritime routes are disrupted

The consequences of disruptions at strategic chokepoints have already been seen elsewhere. The Suez Canal in Egypt is one of the main trade routes connecting Asia, Europe, and the Americas. Data from the U.S. Energy Information Administration indicate that the canal is a critical corridor for global energy trade. According to the agency, “approximately 10 percent of global seaborne oil trade passes through the Suez Canal.”

Since late 2023, attacks by Houthi rebels on commercial vessels in the Red Sea have significantly reduced traffic through the canal. Faced with growing security risks, many shipping companies rerouted vessels around the Cape of Good Hope, a longer journey that increases transit times and logistical costs, according to analyses by the International Monetary Fund and maritime trade researchers.

Venezuela and the world’s largest oil reserves

In moments of tension affecting major energy routes, supply from other regions becomes more relevant. In that context, Venezuela emerges as a potentially significant player in the global energy landscape.

The country holds the largest proven oil reserves in the world. According to Investopedia, Venezuela has around 300 billion barrels of proven reserves, roughly 17 percent of the global total, placing it ahead of major producers such as Saudi Arabia and Iraq.

Refineries along the U.S. Gulf Coast have historically been designed to process heavy crude like the oil produced in Venezuela. In that sense, greater energy cooperation between the two countries could expand the supply available to international markets.

When routes such as the Strait of Hormuz face disruptions, production and refining capacity outside the Middle East become increasingly important for maintaining global supply stability. U.S. Department of Defense officials told La Tilde that this scenario also carries strategic implications for the Western Hemisphere. In their view, tensions affecting global energy routes “heighten the importance of bringing production in Venezuela back to historical levels or greater,” while also creating “the additional benefit of denying oil to bad actors external to the Western Hemisphere.”

In a context where key global energy corridors face potential disruption, restoring production capacity in the Americas could help diversify supply and reduce exposure to chokepoints such as the Strait of Hormuz.

Implications for Latin America

Crises also have repercussions in Latin America. In countries such as Colombia, rising international oil prices can translate into higher transportation costs and inflationary pressures.

At the same time, hydrocarbon-producing countries may benefit from increased export revenues.

Panama occupies a unique position in global trade because of the interoceanic canal connecting the Atlantic and Pacific oceans.

The Panama Canal is one of the most important logistical infrastructures in international commerce. Each year more than 14,000 vessels use the canal to shorten routes between the Atlantic and Pacific and facilitate trade between continents, according to statistics from the Panama Canal Authority.

Recent events involving the Suez Canal have shown that even isolated incidents can trigger costly delays across global supply chains. For that reason, the stability and security of these maritime corridors are considered strategic for international trade.

In a world where energy and commerce depend on specific routes, the disruption of a single strait can reshape markets on a global scale. In that context, the availability of large energy reserves outside the main zones of tension becomes increasingly relevant. Venezuela, with the largest proven oil reserves on the planet, once again appears on the map as a potential factor in addressing disruptions to the global energy supply.