In the wake of President Donald Trump's attempt to overthrow President Nicolas Maduro in oil-rich Venezuela, analysts predict that the energy markets are unlikely to be significantly impacted in the near future. While the scale of the U.S. attack was unexpected, the markets had already anticipated a conflict with Venezuela that would disrupt oil exports. Venezuela, a founding member of OPEC, possesses the largest proven oil reserves globally, but its current production stands at less than a million barrels per day, accounting for less than 1% of global oil production, according to chief analyst Arne Lohmann Rasmussen of A/S Global Risk Management. The conflict also occurs in a global oil market that is oversupplied and facing relatively weak demand, a pattern typical during the first quarter of the year.
Rasmussen predicts that Brent crude prices will only rise by a modest $1 to $2, or even less, when futures trading resumes on Sunday night. He forecasts that Brent will edge lower next week compared to its Friday closing price of $60.75. Despite the geopolitical event's potential to boost oil prices, the market's oversupply is the primary factor preventing oil prices from skyrocketing. Bob McNally of Rapidan Energy advises clients that around a third of Venezuela's oil production is at risk, but he does not anticipate a complete cutoff, posing a minimal short-term risk to oil markets.
The oil market in 2025 experienced its most significant annual decline in five years, with Brent falling by approximately 19% and U.S. crude oil losing nearly 20%. The market pressure arises from OPEC+'s increased production after years of output cuts and the U.S.'s record-high production of over 13.8 million barrels per day. As the regime change raises the possibility of increased oil production in Venezuela, analysts suggest that oil prices may decline further. Saul Kavonic, head of energy research at MST Financial, estimates that exports could reach 3 million barrels in the medium term if a new Venezuelan government leads to the lifting of sanctions and the return of foreign investors.
However, the future of Venezuela's energy sector remains uncertain. Energy industry consultant David Goldwyn, a former top State Department energy official in the Obama administration, notes that the uncertainty surrounding the interim and future governments in Venezuela makes it challenging to predict U.S. oil companies' investment decisions. Companies, including Exxon Mobil, are still awaiting payment for debt owed by Venezuela's national oil company, Petróleos de Venezuela S.A. (PDVSA). McNally acknowledges the complicated proposition for U.S. oil companies, citing the memory of being kicked out of Venezuela in the early 2000s when the country expropriated foreign oil companies' assets. Despite this, the prospect of accessing the world's largest oil reserves could be 'tantalizing' if sanctions were lifted, but it would require decades of investment and billions of dollars, raising the question of whether the world needs that much oil.
