Chevron Is Really Flying, Jim Cramer Says, But Can Venezuela Double Output?
Jim Cramer just called Chevron a winner at a 52-week high, but independent analysts and a prominent Venezuela skeptic see a critical gap between Chevron's five-year production promise and what the barrels actually require to reach market.
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Jim Cramer likes what he sees in Chevron (NYSE:CVX | CVX Price Prediction). The stock closed at $211.05 on September 1, a fresh 52-week high, and is up 42.32% year to date. On Tuesday morning, CEO Mike Wirth walked onto CNBC’s Squawk Box and gave shareholders a fresh reason to cheer: a headline Venezuela expansion. Cramer’s endorsement of the stock, however, sits next to a very specific question, one the same broadcast raised within minutes. Can Venezuela actually double its output on Chevron’s schedule?
What Chevron Just Told the Market
Chevron said its Venezuelan joint venture will invest more than $7 billion over the next five years, with plans to roughly double production to about 600,000 barrels a day. The joint venture will pick up existing acreage in the Cocoa Belt, where Chevron already has an operating footprint through Petroindependencia and Petropiar. Wirth framed the plan as additive rather than competitive with U.S. barrels, according to comments he made on CNBC.
On the July earnings call, Wirth had already told analysts Chevron is “actively working with the government to look at other opportunities” and that any additional spend has to “compete in our portfolio for capital.” Management also said existing Venezuelan JV output has grown from 40,000 to 250,000 barrels in recent years, and that Chevron expects its Venezuelan debt to be fully recovered by early 2027.
Why Analysts Are Flagging the Timeline
Kpler’s Amena Bakr has been public about her skepticism. In earlier commentary, she wrote that the barrels capable of moving U.S. pump prices are “5 to 15 years out.” Michelle Caruso-Cabrera of MCC Global has also flagged contract-sanctity risk on Venezuelan deals under the current political framework. Chevron’s five-year clock diverges from the independent view of a decade-plus ramp, and the gap matters for anyone paying a peak price today.
Financial Firepower Behind the Bet
The Q2 earnings report gives Chevron room to spend without stretching the balance sheet. Chevron reported adjusted EPS of $6.06 on revenue of $67.2 billion, up 51.43% year over year, per its 8-K filing. Free cash flow was $18.10 billion, and Chevron reduced debt by $8.41 billion in the quarter alone. Worldwide production hit 4,070 MBOED, up 20% year over year, with a record 2,077 MBOED from U.S. upstream and refineries running at 97% utilization.
Wirth summarized the quarter this way: “Our strong second quarter performance is a result of disciplined investment and strong execution that drove record U.S. upstream production, record crude throughput in our U.S. refineries, and exceptional reliability across key assets.” Chevron returned capital aggressively too, with $3.117 billion in Q2 buybacks and a $1.78 quarterly dividend.
Valuation Reality Check
CVX now trades at $211.73, with a trailing P/E near 34. Against a 2026 consensus EPS of $15.87, the forward multiple is roughly 13x. The 2027 EPS consensus, however, slips to $13.20, reflecting analyst caution about oil prices normalizing from spring highs. WTI ran to $105.67 on April 3 and has since settled at $87.35 as of August 21, still well above the $57.54 print on January 2 that anchored the year.
What CVX Shareholders Are Actually Paying For
Cramer is right that Chevron is flying. The Q2 execution, the balance-sheet strength, the Microsoft AI power deal, and the Iraq and Guyana pipelines all justify the run. The Venezuela leg is the one to watch. If Chevron hits 600,000 barrels a day within five years, shareholders paying a 52-week high are getting a compounding growth option on top of the base business. If Bakr’s decade timeline is closer to the truth, the market is already paying for barrels that arrive well after this cycle. The next catalysts to monitor are Q3 earnings on September 30, TCO affiliate distributions at higher Brent, and any confirmation of Venezuelan JV terms that would allow Chevron to book incremental reserves.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, and Money Morning. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
