The recent capture of Venezuelan President Nicolás Maduro and subsequent discussions about opening the country’s vast oil reserves to Western investment have sparked a key question within the U.S. agriculture sector: What impact will this situation ultimately have on farmers?
While current headlines focus on immediate geopolitical shifts and the actions of energy companies, the resulting ripple effects could eventually reduce U.S. farmers’ fuel expenses and other input costs, according to Bob Elliott, co-founder of Unlimited Funds.
However, Elliot emphasizes that even if Western oil companies successfully establish operations in Venezuela, it will take years to repair the damaged infrastructure there and bring a meaningful new supply of oil online.
“While Venezuela has some of the largest proven oil reserves in the world they have been chronically under-producing due to decades of underinvestment and poor management,” he explains. “As we transition to a point where maybe more Western oil companies come in, they could invest and create supply but that’s a story that’s going to take years to unfold.”
If Western investment is successful, Venezuela could eventually add “a few million barrels per day” to the world’s supply, a volume significant enough to help drive global oil prices lower, Elliott notes. Over time, this increase in supply could ease costs for diesel and gasoline, reduce input expenses (including fertilizer and freight) and generally improve the overall cost of production for farmers.
Don’t Expect Any Short-Term Relief
Despite the long-term potential, Elliott emphasizes that the current developments offer little to no immediate benefit for farmers and consumers.
“If you’re looking to get a little relief at the gas pump, it’s not going to happen from this effect anytime soon,” he says.
Furthermore, cheaper global oil, influenced by Venezuelan supply, would introduce a trade-off for U.S. oil-producing regions.
Elliott explains that “at $60 oil, we’re right on the cusp of break evens for the major U.S. oil producing regions.” The implication is that farm communities closely tied to oil and gas employment could experience economic fallout if domestic prices were to drop too sharply. Even so, Elliott believes farmers across the country would still welcome lower fuel and freight costs.
The U.S. Advantage In Refining Venezuelan Crude
From a logistical standpoint, Elliott points out that the U.S. refining industry is well-equipped to handle the specific type of crude that comes from Venezuela, which is a “sour” crude.
Sour crude is characterized by a high sulfur content (over 0.5%) and significant amounts of hydrogen sulfide, making it more corrosive and challenging—and thus more costly—to refine than “sweet” (low-sulfur) crude, according to the American Fuel & Petrochemical Manufacturers.
“We’ve got the refiners that can handle the sour crude that comes out of Venezuela down in Texas… we’re set up better to handle that kind of crude oil than any country in the world, really,” notes Chip Flory, host of AgriTalk.
Strategic Outlook for Farmers
Elliott points out that the Venezuelan situation is unfolding against a backdrop of wider geopolitical tensions, including concerns surrounding Iran and other global conflicts.
“All of those highlight some of the uncertainties in the geopolitical picture coming into 2026. It’s part of the reason why gold is getting such a bid to open the new year here,” he notes.
Elliott says the best course of action for farmers is to continue managing their fuel as if the market will remain tight—while simultaneously recognizing that, a few years down the line, new barrels from Venezuela could significantly shift the cost landscape in agriculture’s favor.
Hear the full conversation between Elliott and Flory on AgriTalk at the link below:
