Oklahoma oil and gas producers are unlikely to feel short-term effects from potential increases in Venezuelan oil production, energy experts say, even as global markets watch developments in the South American nation’s energy sector.
Stephen Agee, dean emeritus of the School of Business at Oklahoma City University, made the assessment during an appearance on Hot Seat with Scott Mitchell, addressing concerns about global energy markets, electricity demand, and broader economic uncertainty.
Agee said that while Oklahoma’s current energy output is weighted more toward natural gas than oil, the state remains fundamentally tied to the oil and gas economy. He emphasized that Venezuela’s severely degraded energy infrastructure will delay any major production rebound for years, not months.
“It’s going to take over $100 billion of expenditure to upgrade what’s going on in Venezuela right now,” Agee said, saying facilities have been neglected for decades.
Agee suggests it could take three to ten years before Venezuelan crude production meaningfully increases.
Agee also pointed out that Venezuelan crude is heavier and more sulfur-intensive than the lighter oils commonly produced in Oklahoma and U.S. shale regions, meaning it is typically refined at Gulf Coast facilities designed for heavy sour crude.
In the near term, he said, Oklahoma producers do not need to worry about Venezuelan oil driving down prices.
However, Agee and other analysts noted that long-term increases in global oil supply could put downward pressure on prices, potentially benefiting consumers but challenging producers.
“The price, I would say, needs to be over $60 [per barrel],” Agee said. “So that price needs to come up from where it is in order for it to be competitive and for producers to go out and drill new wells.
The discussion also turned to electricity demand in Oklahoma, particularly with the growth of artificial intelligence and data center development. Agee said the state is attractive for data centers because of low land costs, available resources, and relatively low power prices, but warned that power infrastructure needs upgrades.
“Transmission is important, whether it’s electric transmission or oil and gas transmission,” Agee said.
Agee criticized efforts to exclude renewables from future energy plans, saying they remain a critical part of the mix even though hydrocarbons account for about 80 percent of U.S. energy consumption.
On the broader economy, Agee cautioned that rapid growth in technology and AI stocks could signal a market bubble, with stock prices rising faster than underlying earnings, although timing a correction remains difficult.
Agee also raised concerns about housing affordability in Oklahoma as out-of-state investors buy large numbers of homes, potentially pricing out local buyers, and suggested lawmakers may need to consider regulatory options.