Nothing remains the same in supply chain – except change! I thought today’s Briefing should relate to the potential opportunities and challenges stemming from the US-Venezuela oil deal.
– Lisa
The closure of the Strait of Hormuz with the Iran conflict has delivered a stark reminder that concentrating too much supply in one region creates risk. Prior to this disruption, approximately 20% of global oil supplies moved through the Strait of Hormuz. With flows severely disrupted, countries have been scrambling to build alternate transportation infrastructure (pipelines) and diversify their energy sources — and the Americas have been among the biggest beneficiaries.
U.S. crude oil exports reached record levels in the second quarter of 2026, increasing 43% from the prior year, while Brazil, Argentina and Guyana also reached record export levels. The recently announced U.S.-Venezuela oil deal is poised to add another significant source of Western Hemisphere supply as it scales up.
The Americas are Emerging as an Energy Supply Chain Powerhouse
The United States is already the world’s largest crude oil producer, producing a record 13.6 million barrels per day in 2025, and production is forecast to increase further in 2026. Meanwhile, crude exports from the Americas are averaging a record 11.7 million barrels per day this year, and the region now accounts for approximately 30% of global seaborne crude exports.
Venezuela could add significantly to this situation. The U.S.-Venezuela agreement provides access to 17 oilfields containing approximately 65 billion barrels of proven reserves. Venezuela will have to ramp up significantly though as the country only produces about 1.25 million barrels per day currently, compared with approximately 3 million at its peak. Since they have the largest oil reserves in the world, there is vast opportunity to scale.
This classic demand vs demonstrated supply gap highlights a critical supply chain issue – turning potential capacity into available capacity. Since the pandemic, one of the largest issues clients have faced is ramping up production. They had the machinery and equipment but not the resources (talent, materials, components) and capabilities to turn potenial capacity into reliable supply.
Years of underinvestment mean increasing Venezuelan production will require oilfield equipment, pumps, valves, compressors, pipe, turbines, electrical equipment and controls, along with investments in power generation, pipelines, export terminals, storage, technology, engineering and skilled labor. Again, the critical importance of the end-to-end supply chain is highlighted – and an opportunity. Who will provide the capacity required to support the rebuild?
Energy Supply Chains & Transportation Routes Are Shifting
If there is a constant in supply chains, it is the rate of change. As countries diversify their energy supply, transportation routes will change. More oil is moving from the United States, Canada, Brazil and other Western Hemisphere producers to customers that historically relied more heavily on the Middle East. Ocean shipping traffic and routes will evolve considerably.
Diversification can improve resilience, but it also changes lead times, transportation costs, inventory requirements and capacity needs. For example, crude traveling from Brazil to India takes substantially longer than shipments from the Middle East. On the other hand, as manufacturing ramps up in the Amercias, crude oil demand will shift from Asia to the Americas to support production. Successful executives will take these changes into consideration.
As you are only as strong as your weakest link in your supply chain, it is important to remember the key steps in your supply chain and related impacts. Venezuela adds another dimension. Its crude is generally heavy and high in sulfur, making U.S. Gulf Coast refineries with the appropriate processing capabilities particularly important. This will impact demand for tankers, ports, terminals, storage, pipelines and refinery capacity.
SIOP (Sales Inventory Operations Planning) type processes to align demand and supply and the links in your supply chain will become more vital, especailly as keeping up with changing demand and suppy patterns becomes integral to serving customers successfully and profitably. Supply chain visibility and advanced systems such as TMS and APS will be required to dynamically adjust with changing patterns and run scenarios.
The Bottom Line
The Strait of Hormuz disruption demonstrated the risk of concentrating critical supply in a single region or transportation corridor. Global energy buyers are responding by diversifying, and the Americas are capturing an increasing share of that demand. Adding Venezuela’s enormous reserves and rebuilding its production capacity will further strengthen the Western Hemisphere’s position in global energy markets, and it will create opportunities throughout energy, manufacturing, infrastructure and logistics supply chains.
Manufacturers should evaluate where demand and transportation flows are shifting, where capacity constraints could emerge, and whether their suppliers can scale. Use SIOP processes to translate changing demand scenarios into capacity, labor, materials and inventory requirements, and leverage ERP, advanced planning and AI capabilities to gain the visibility needed to respond quickly. As energy supply chains diversify, companies that anticipate where demand and capacity requirements are moving will be best positioned to take advantage of the opportunities.
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