By MICHELLE CHAPMAN, Associated Press Business Writer

Shares of major U.S. companies in the energy sector are sharply higher Monday after President Donald Trump announced plans to take control of Venezuela’s oil industry and said American companies would revitalize it after capturing President Nicolás Maduro.

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While the U.S. action is unlikely to have an immediate impact on crude prices given the current glut in the market, it could upend energy markets.

Venezuela’s oil industry is in disrepair after years of neglect and international sanctions. Some oil industry analysts believe that Venezuela could double or triple its current output of about 1.1 million barrels of oil a day and return the nation to historic production levels relatively quickly, others see a much longer road ahead.

“While the Trump administration has suggested large U.S. oil companies will go into Venezuela and spend billions to fix infrastructure, we believe political and other risks along with current relatively low oil prices could prevent this from happening anytime soon,” wrote Neal Dingmann of William Blair. Material change to Venezuelan production will take a lot of time and millions of dollars of infrastructure improvement, he said.

Any investment in Venezuelan energy infrastructure right now would take place in a weakened global energy market. Crude prices in the U.S. are down 20% compared with last year. The price for a barrel of benchmark U.S. crude hasn’t been above $70 since June, and hasn’t touched $80 per barrel since the summer of 2024.

JPMorgan foresees a brief, sharp dip in Venezuelan production, but said production could reach 1.3 million to 1.4 million barrels per day within two years of a political transition.

“With new investments and major institutional reforms, output could potentially expand to 2.5 mbd over the next decade,” JPMorgan wrote.

Yet almost all energy analysts said the situation is extremely fluid. John Freeman of Raymond James pointed to an abundance of unknowns, including how quickly U.S. energy companies would be willing to invest.

“Additionally, other areas of interest include further actions by the U.S. in Latin America (e.g., Cuba?), along with continued unrest in Iran,” Freeman wrote. “There’s plenty of uncertainty in the backdrop, and clearly 2026 is off to a ‘hot’ start.”

At the opening bell, shares in the energy sector moved broadly higher, particularly companies with large refinery operations.

Venezuela produces the kind of heavy crude oil that’s needed for diesel fuel, asphalt and other fuels for heavy equipment. Diesel is in short supply around the world because of the sanctions on oil from Venezuela and Russia and because America’s lighter crude oil can’t easily replace it.

“A bullish production outlook would be a big boost for U.S. refiners, as much of the Gulf Coast refining capacity is designed to run heavy/sour crude like those from Venezuela,” wrote Freeman said.

Big refiners like Valero, Marathon Petroleum and Phillips 66 rose between 5% and 6% at the opening bell.

Oilfield service companies, those that actually go into the field and do the drilling and upkeep, rose even more sharply.

SLB and Halliburton rose between 7% and 8%.

Major oil exploratory companies including ExxonMobil, Chevron and ConocoPhillips rose between 2% and 4%.

Texas Observer reader,

Call me biased, but I do believe you’re holding a damn good magazine in your hands right now.

Michelle Pitcher continues her ascent as one of the state’s best criminal justice reporters and narrative feature writers. Josephine Lee again takes you into a corner of Houston culture you might otherwise never know (see her prior coverage online of the Taiwanese-Houstonian community and of shaved ice, in its many Bayou City forms). 

Special Correspondent Steven Monacelli braids a local Dallas power play into an overarching state- and federal-level war for control of homelessness policy. And freelancer Gaige Davila takes you to southwest Louisiana to illuminate the future of his native corner of deep South Texas. 

It’s a strong start for the Observer to a year that, for the nation, I can only expect to tend toward the awful.

(Photograph by Jordan Vonderhaar/Texas Observer)

The pattern of a midterm year under a GOP president will play out: Primary beefs of varying levels of authenticity and import will emerge, a small fraction of the country will cast some votes, hope will be found. The tea leaves of special elections will be read and, likely, will portend well for Team Blue. Money—not enough for most, too much for a few—will be spent. The best case for American small-d democracy: A leg of the national Republican tripod will be kicked out come November. 

The problem? Trump hardly needs a well-functioning Congress to further his agenda of racialized collective punishment and personalized legal vengeance. He’s got his liberated executive branch, which, frankly, the nation’s citizenry as a whole bears some responsibility for allowing. And he’s got the courts for… suffice it to say, a long time into the future.

In other words, barring the intervention of an angry god (not a bad idea), we’re just getting started. You and I, that is, are just getting started. 

Whatever you’re doing now to shift the winds of fate toward a better future for the world’s children who didn’t do a blessed thing to deserve all this mess, well, I regret to remind you that you’ve still only just begun. 

So, here’s to 2026. It’s coming one way or another.

Solidarity,

Note: To be the first to get all the stories in our bimonthly issues, become a Texas Observer member here.

The post Editor’s Letter: Introducing Our January/February 2026 Issue appeared first on The Texas Observer.

By KONSTANTIN TOROPIN, Associated Press

WASHINGTON (AP) — Defense Secretary Pete Hegseth on Monday announced that he is issuing a letter of censure to Democratic Sen. Mark Kelly of Arizona over the lawmaker’s participation in a video that called on troops to resist unlawful orders.

FILE – Sen. Mark Kelly, D-Ariz., refutes efforts by President Donald Trump and Defense Secretary Pete Hegseth to intimidate him and other lawmakers after expressing concerns over U.S. military strikes against vessels suspected of smuggling drugs in the Caribbean, during a news conference at the Capitol, in Washington, Dec. 1, 2025. (AP Photo/J. Scott Applewhite, File)

Hegseth said that the censure was “a necessary process step” to proceedings that could result in a demotion from Kelly’s retired rank of captain in the U.S. Navy.

The move comes more than a month after Kelly participated in a video with five other Democratic lawmakers in which they called on troops to defy “illegal orders.” President Donald Trump accused the lawmakers of sedition “punishable by DEATH” in a social media post days later.

In November, Kelly and the other lawmakers — all veterans of the armed services and intelligence community — called on U.S. military members to uphold the Constitution and defy “illegal orders.”

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The 90-second video was first posted from Sen. Elissa Slotkin’s X account. In it, the six lawmakers — Slotkin, Kelly and Reps. Jason Crow, Chris Deluzio, Maggie Goodlander and Chrissy Houlahan — speak directly to U.S. service members, whom Slotkin acknowledges are “under enormous stress and pressure right now.”

Afterward, Trump accused them of sedition “punishable by DEATH,” reposting messages from others about the video and amplifying it with his own words.

Kelly, along with some of the other Democrats in the initial video, have sent out fundraising messages based off the Republican president’s reaction to their comments, efforts that have gone toward filling their own campaign coffers and further elevating their national-level profiles.

Minnesota Gov. Tim Walz announced on Monday that he will not seek a third term.

Here is his statement in its entirety:

“Good morning, and Happy New Year.

“Like many Minnesotans, I was glad to turn the page on 2025. It was an extraordinarily difficult year for our state. And it ended on a particularly sour note.

“For the last several years, an organized group of criminals have sought to take advantage of our state’s generosity. And even as we make progress in the fight against the fraudsters, we now see an organized group of political actors seeking to take advantage of the crisis.

“I won’t mince words here. Donald Trump and his allies – in Washington, in St. Paul, and online – want to make our state a colder, meaner place. They want to poison our people against each other by attacking our neighbors. And, ultimately, they want to take away much of what makes Minnesota the best place in America to raise a family. They’ve already begun by taking our tax dollars that were meant to help families afford child care. And they have no intention of stopping there.

“Make no mistake: We should be concerned about fraud in our state government. We cannot effectively deliver programs and services if we can’t earn the public’s trust. That’s why, over the past few years, we’ve made systemic changes to the way we do business.

“We’ve gone to the legislature time and again to get more tools to combat fraud. We’ve fired people who weren’t doing their jobs. We’ve seen people go to jail for stealing from our state. We’ve cut off whole streams of funding, in partnership with the federal government, where we saw widespread criminal activity. We’ve put new locks on the doors of our remaining programs, and we’ve hired a new head of program integrity to make sure those locks can’t be broken.

“All across the state, Minnesotans are hard at work on this problem. Advocates, administrators, investigators are on the front lines defending the integrity of our state’s programs, and I want to thank them for their efforts.

“There’s more to do. A single taxpayer dollar wasted on fraud is a dollar too much to tolerate. And while there’s a role to play for everyone – from the legislature to prosecutors to insurance companies to local and county government – the buck stops with me. My administration is taking fast, decisive action to solve this crisis. And we will win the fight against the fraudsters.

“But the political gamesmanship we’re seeing from Republicans is only making that fight harder to win.

“We’ve got Republicans here in the legislature playing hide-and-seek with whistleblowers.

“We’ve got conspiracy theorist right-wing YouTubers breaking into daycare centers and demanding access to our children.

“We’ve got the President of the United States demonizing our Somali neighbors and wrongly confiscating childcare funding that Minnesotans rely on.

“It is disgusting. And it is dangerous.

“Republicans are playing politics with the future of our state. And it’s shameful. I’ve said it before, and I’ll say it again: We welcome ideas from anyone, in any party, who wants to help us continue to stay ahead of the criminals.

“And we welcome the involvement of the federal government. I’m grateful to the career professionals at the U.S. Attorney’s office and the FBI who are helping us win this fight.

“But I cannot abide the actions of the political leadership in Washington – these opportunists who are willing to hurt our people to score a few cheap points. They and their allies have no intention of helping us solve the problem – and every intention of profiting off of it.

“Which brings me to this: 2026 is an election year. And election years have a way of ramping up the politics at a time when we simply can’t afford more politics.

“In September, I announced that I would run for a historic third term as Minnesota’s Governor. And I have every confidence that, if I gave it my all, I would succeed in that effort.

“But as I reflected on this moment with my family and my team over the holidays, I came to the conclusion that I can’t give a political campaign my all. Every minute I spend defending my own political interests would be a minute I can’t spend defending the people of Minnesota against the criminals who prey on our generosity and the cynics who prey on our differences.

“So I’ve decided to step out of the race and let others worry about the election while I focus on the work.

“I know this news may come as a surprise. But I’m passing on the race with zero sadness and zero regret. After all, I didn’t run for this job so I could have this job. I ran for this job so I could do this job. Minnesota faces an enormous challenge this year. And I refuse to spend even one minute of 2026 doing anything other than rising to meet the moment. Minnesota has to come first – always.

“That’s what I believe servant leadership demands of me. And as an optimist, I will hold out some hope that my friends on the other side of the aisle will consider what servant leadership demands of them in this moment. We can work together to combat the criminals, rebuild the public’s trust, and make our state stronger. But make no mistake: If Republicans continue down this path of abusing power, smearing entire communities, and running their own fraudulent game at the expense of Minnesotans – we will fight back every step of the way.

“I’m confident that a DFLer will hold this seat come November. I’m confident that I will find ways to contribute to the state I love even after I’ve left office next January. But there will be time to worry about all that later.

“Today, I’m proud of the work we’ve done to make Minnesota America’s best place to live and raise kids – from our new paid leave policy to our child tax credit to our free lunch program.

“And I’m doubly proud of the incredible team we’ve put together to make that vision a reality. Thank you to every member of my staff, and every state employee, who’s part of this fight. We need you on the job to tackle the important work ahead.

“Most of all, I want Minnesotans to know that I’m on the job, 24/7, focused on making sure we stay America’s best place to live and raise kids. No one will take that away from us. Not the fraudsters. And not the President. Not on my watch.”

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