WTI prices slipped but were still on course for roughly 12% monthly gains, underpinned by elevated geopolitical risk premiums.
Iran warned of an unprecedented response following renewed threats from President Trump over nuclear negotiations.
Meanwhile, the Trump administration loosened some sanctions on Venezuela’s oil sector on Thursday to attract U.S. investment.
West Texas Intermediate (WTI) crude edged lower after three consecutive sessions of gains, trading near $64.00 a barrel during Asian hours on Friday. Still, the benchmark remained on track for about a 12% monthly increase, supported by a strengthening geopolitical risk premium.
Geopolitical tensions stayed elevated after Iran warned it would “defend itself and respond like never before” following renewed threats from U.S. President Donald Trump, who urged Tehran to engage in nuclear negotiations. Iranian officials cautioned that any provocation would be met with retaliation.
Tensions escalated further after the European Union designated Iran’s Islamic Revolutionary Guard Corps as a terrorist organization. Concerns were compounded by reports that the United States was bolstering its military presence near Iran, while Tehran announced live-fire military exercises in the strategically vital Strait of Hormuz, heightening worries over regional security.
Markets are closely watching the potential impact of these developments on shipping through the Strait of Hormuz, a critical chokepoint between Iran and the Arabian Peninsula that handles daily flows of crude oil and LNG. According to Dow Jones Newswires, Westpac Strategy Group warned that any regime change in Iran would likely be disorderly, unlike the U.S-backed removal of Venezuela’s Nicolas Maduro or targeted strikes such as those on Fordow.
Separately, the Trump administration eased certain sanctions on Venezuela’s oil sector on Thursday to attract U.S. investment following President Nicolas Maduro’s removal earlier this month. The U.S. Treasury authorized transactions involving Venezuela’s government and state-run PDVSA, allowing U.S. firms to produce, transport, sell, and refine Venezuelan crude.
Earlier this month, oil prices also drew support from supply disruptions in Kazakhstan, freeze-offs in the United States, and tighter U.S. restrictions on Russian oil purchases, helping underpin prices this year despite lingering expectations of global oversupply.
WTI prices rise amid growing supply concerns linked to escalating unrest in Iran.
President Trump has warned Tehran against using force on protesters, while Iran has warned the U.S. and Israel against any intervention.
However, oil price gains may be capped due to anticipated resumption of Venezuelan exports and forecasts of a potential market oversupply.
West Texas Intermediate (WTI) crude extended its gains for a third consecutive session, trading around $59.10 per barrel during Asian hours on Monday. The rise in oil prices is driven by growing supply concerns amid escalating protests in Iran. As OPEC’s fourth-largest producer, exporting nearly 2 million barrels per day, any conflict escalation poses a significant risk to global supply.
The unrest, now in its third week and having reportedly resulted in hundreds of casualties, has prompted Iranian authorities to signal a harsher crackdown. Meanwhile, U.S. President Donald Trump warned Tehran against using force on protesters and suggested possible intervention if the situation worsens, while Iranian officials cautioned against any U.S. or Israeli involvement.
Oil price gains may be restrained by expectations that Venezuelan crude exports could resume following political changes in the country, with the U.S. poised to receive or manage up to 50 million barrels of sanctioned oil under a new arrangement with interim authorities. This potential influx of supply has tempered some of the upside from geopolitical risk.
However, uncertainty remains over the timing and scale of Venezuelan shipments, as shifting U.S. policy and the logistics of restarting exports from dilapidated ports and vessels cloud the outlook for actual flows.
Meanwhile, traders are watching for possible supply disruptions from Russia amid ongoing Ukraine attacks on energy infrastructure and the prospect of tougher U.S. sanctions on Russian energy exports — factors that could add upward pressure on prices if they materially reduce output.
Oil prices remained mostly steady during Asian trading on Monday as investors balanced concerns over potential supply disruptions due to escalating unrest in Iran against the likelihood of more Venezuelan crude returning to the market.
As of 22:23 ET (03:23 GMT), March Brent crude futures rose slightly by 0.1% to $63.39 per barrel, while West Texas Intermediate (WTI) futures also increased by 0.1% to $59.15 per barrel. Both benchmarks had gained over 3% last week amid heightened geopolitical tensions.
Iran’s lethal protests raise fears of oil supply disruption
Markets have been closely monitoring Iran, a major oil producer in the Middle East, where widespread anti-government protests have escalated in recent days. According to rights organizations, over 500 people have died amid the unrest.
Iranian authorities have warned that U.S. military bases in the region would be targeted if Washington intervenes in support of the protesters. This threat has intensified concerns about a wider regional conflict that could disrupt oil shipments passing through the Strait of Hormuz, a critical artery for global energy supplies.
U.S. President Donald Trump adopted a tougher stance on Iran last week, declaring that the U.S. would not remain passive if Iranian forces continue harsh crackdowns on demonstrators.
“Iran, as the fourth-largest OPEC member, produces about 3.2 million barrels per day of crude oil, which represents a significant supply risk for the market,” ING analysts noted in a recent report.
Resumption of Venezuelan oil exports limits upside in oil prices
However, gains were limited by news from Venezuela, where U.S. officials indicated they might ease restrictions on the country’s oil sector. U.S. Treasury Secretary Scott Bessent said additional sanctions could be lifted as early as next week to help facilitate the sale of Venezuelan crude and support oil exports.
President Donald Trump also revealed plans for Venezuela to turn over up to 30 – 50 million barrels of previously sanctioned oil to the United States.
Despite the prospects of renewed output, major oil companies are cautious about re-entering the Venezuelan market without substantial legal and political reforms. ExxonMobil has described the country as “uninvestable” without major changes, and analysts note that firms whose assets were nationalised previously may be reluctant to return without adequate compensation.
Oil companies seeking to take part in newly approved exports of Venezuelan crude to the United States after the removal of President Nicolás Maduro are holding urgent talks to secure tankers and organize operations to safely transfer oil from ships and deteriorating Venezuelan ports, according to four sources familiar with the matter.
Trading firms and energy companies such as Chevron, Vitol, and Trafigura are vying for U.S. government contracts to export Venezuelan crude, the sources said, after President Donald Trump announced that Venezuela could deliver up to 50 million barrels of previously sanctioned oil to the United States.
Trafigura told the White House in a meeting on Friday that its first vessel is expected to load within the coming week.
After months under a U.S. blockade, Venezuela has been storing crude aboard tankers and has nearly exhausted its onshore storage capacity. Many of these vessels are aging, poorly maintained, and subject to sanctions. Due to insurance and liability restrictions, other ships cannot directly interact with sanctioned tankers—even if U.S. licenses are granted—sources added.
Onshore storage facilities have also suffered years of neglect, creating additional risks for companies attempting to load the oil.
Shipping firms including Maersk Tankers and American Eagle Tankers are among those seeking to expand ship-to-ship transfer operations in Venezuela, according to three of the sources.
According to one source, Maersk Tankers could reuse the ship-to-shore-to-ship logistics model it previously employed in Venezuela’s Amuay Bay. The company already operates in nearby Aruba and Curaçao, whose waters are frequently used for transferring Venezuelan oil. However, while such transfers are feasible in Aruba and at U.S. ports, they come at a higher cost.
In a statement, Maersk said its presence in Venezuela remains limited, with only 17 employees in the country. The company confirmed that all staff are safe and accounted for, and that there have been no changes to its ocean services. Operations are continuing with only minor delays, and the situation is being closely monitored.
Another shipping source noted that transfer operations will be further complicated by a shortage of smaller vessels needed to move oil from storage tankers to piers, where it can then be transferred to other ships, as well as by poorly maintained machinery and equipment.
American Eagle Tankers (AET), which already facilitates Chevron’s shipments of Venezuelan crude to the United States, is being contacted by potential customers seeking to expand its capacity in the region, two sources said.
Neither AET nor Chevron immediately responded to requests for comment.
Sources added that while exports could potentially return to the roughly 500,000 barrels per day that Venezuela shipped to the United States before sanctions—allowing stockpiles to be drawn down within 90 to 120 days—reaching that level will be difficult if crude must be sourced from both offshore tankers and onshore storage facilities.
Companies are also fiercely competing for loading slots at Venezuela’s main Jose oil terminal, where both capacity and operating speed are constrained. Chevron, a major joint-venture partner in the country, is working aggressively to maintain its preferential access to Venezuelan terminals while preparing its vessel fleet, according to one source.
Meanwhile, oil firms including Chevron, Vitol, and Trafigura are already securing supplies of much-needed naphtha, a Venezuelan industry source said. Naphtha is commonly blended with heavy Venezuelan crude to reduce its density, making it easier to transport and refine.
Oil prices advanced during Asian trading on Friday, extending the previous session’s rebound as investors focused on possible supply disruptions in Russia and Iran amid geopolitical risks.
At the same time, fears of an immediate rise in Venezuelan oil output subsided after the U.S. Senate approved a measure requiring congressional authorization for further military action by President Trump.
Analysts said oil production in the country is unlikely to increase sharply in the near term, even with U.S. intervention.
Brent crude futures for March rose 0.7% to $62.44 a barrel, while WTI futures gained 0.7% to $58.03 by 21:04 ET (02:04 GMT). Both benchmarks rebounded to levels seen before last week’s U.S. military action in Venezuela after posting more than 4% gains on Thursday.
Oil prices were supported by positive inflation data from China, the world’s top oil importer, signaling a tentative economic recovery. However, gains were limited as traders remained cautious ahead of key U.S. nonfarm payrolls data that could affect interest rate expectations.
Markets focus on potential supply disruptions in Russia and Iran
Concerns about possible supply disruptions in Russia and the Middle East lent support to oil prices this week.
The conflict between Russia and Ukraine showed little sign of resolution, with ongoing military actions. A drone strike on a tanker headed to Russia in the Black Sea heightened fears of further interruptions to Russian crude supplies.
Compounding these concerns, reports indicated that U.S. President Donald Trump plans to endorse a bipartisan bill imposing even tougher restrictions on countries trading with Russia, aiming to increase pressure on Moscow to seek a ceasefire.
Meanwhile, Iraq’s government approved a move to nationalize operations at the West Qurna 2 oilfield—one of the world’s largest—in an effort to avoid supply disruptions stemming from U.S. sanctions on Russia.
In Iran, escalating nationwide anti-government protests have raised worries about potential impacts on oil production. The government responded with a countrywide internet blackout as demonstrations spread across major cities protesting the Nezam regime.
Market concerns over Venezuelan oil supply ease
Oil prices benefited from easing worries that a U.S. intervention in Venezuela would lead to a significant near-term surge in global crude supply.
Earlier this week, Trump stated that Caracas could deliver up to $3 billion worth of oil to the U.S. and indicated plans for long-term U.S. influence over the country.
However, Congress has advanced legislation that may restrict U.S. military involvement in Venezuela.
Many analysts noted that while U.S. involvement could eventually help boost Venezuelan oil production, persistent political turmoil and deteriorated infrastructure make any near‑term surge in output unlikely.
Oil prices initially plunged after the U.S. detained Venezuelan President Nicolás Maduro and signaled control over the country’s oil industry, but prices had fully recovered by Friday as markets judged immediate changes to supply to be limited.
Still, crude prices were experiencing their steepest annual decline in five years in 2025, weighed down by concerns over a widening supply glut and sluggish demand growth—an outlook echoed by major global institutions forecasting continued oversupply into 2026.
Oil prices weakened yesterday after President Trump said Venezuela would supply large volumes of sanctioned crude to the United States.
Energy
Developments in Venezuela remain in the spotlight, adding further downside pressure to oil prices. President Trump said Venezuela is prepared to sell up to 50 million barrels of sanctioned crude to the United States, a move that could also immediately weigh on Canadian crude exports to the U.S.
Such a deal would effectively open a release channel for Venezuelan oil, which has struggled to reach global markets due to a U.S. blockade on sanctioned tankers entering and leaving the country. Redirecting these barrels to the U.S. could ease storage constraints and reduce the need for Venezuela to curb production.
The U.S. Department of Energy confirmed that Venezuelan crude is already being marketed internationally, while Trump’s energy secretary stated that Washington intends to maintain long-term control over future Venezuelan oil sales. This strategy is reinforced by the continued tanker blockade, with two additional vessels reportedly seized yesterday.
Washington’s growing influence over Venezuela’s oil sector also raises uncertainty about the country’s future role within OPEC.
Meanwhile, Energy Information Administration (EIA) data showed U.S. crude inventories fell by 3.83 million barrels last week, the sharpest draw since late October. However, product balances were more bearish, as gasoline stocks rose by 7.7 million barrels and distillate inventories increased by 5.6 million barrels.
These inventory builds point to refinery utilization remaining firm, while implied demand for both products softened somewhat over the past week.
European gas prices moved higher yesterday, with TTF closing more than 2.5% up on the day. Colder conditions across parts of Europe, along with forecasts for below-average temperatures in the days ahead, are supporting the market. The current cold spell has also accelerated storage drawdowns, with EU gas inventories now at 58% of capacity, compared with a five-year average of 72%.
The latest positioning data show that investment funds cut their net short exposure in TTF for a third straight week. Funds purchased 6.2 TWh during the latest reporting period, reducing their net short position to 72.4 TWh.
Oil prices climbed during Asian trading on Thursday, regaining some losses after sharp declines triggered by worries over rising Venezuelan crude supplies.
Additionally, stronger-than-anticipated weekly declines in U.S. oil inventories supported the price recovery. Ongoing conflict between Russia and Ukraine also contributed to maintaining a risk premium in the market.
March Brent crude futures increased by 0.7% to reach $60.38 per barrel, while West Texas Intermediate (WTI) futures also gained 0.7%, settling at $56.28 per barrel as of 20:25 ET (01:25 GMT). Both benchmarks had fallen more than 1% over the previous two sessions.
Attention turns to US – Venezuela oil agreement after Trump highlights up to $3 billion in planned crude sales
Oil markets are closely watching the impact of a new agreement between the U.S. and Venezuela on global oil supplies.
U.S. President Donald Trump announced on Tuesday that Venezuela will deliver between 30 million and 50 million barrels of oil to the U.S., valued at up to $3 billion, shortly after U.S. forces detained Venezuelan President Nicolás Maduro.
Trump also appeared to encourage multiple U.S. oil companies to expand production activities in Venezuela, with Chevron Corp (NYSE: CVX) leading these efforts. According to Reuters, Chevron is negotiating to broaden its license to operate in the country.
Currently, Chevron is the only major U.S. oil company active in Venezuela, benefiting from special government exemptions that shield it from stringent sanctions imposed on the nation.
Markets are worried that a significant rise in Venezuelan oil output could further swell global supplies, adding to prevailing fears of an oil glut in 2026. Traders are already pricing in ample supply conditions, with expectations that any additional barrels from Venezuela might weigh on crude prices.
However, analysts caution that any meaningful increase in Venezuelan production is unlikely to happen quickly, given the country’s deep political instability and the extensive investment needed to rebuild its dilapidated oil infrastructure after recent upheavals.
A Financial Times report also noted that U.S. oil firms are seeking strong legal and financial guarantees from the U.S. government before committing to major investments in Venezuela’s oil sector, reflecting industry hesitancy amid uncertain policy and market conditions.
U.S. crude stockpiles decline beyond forecasts
Government data released Wednesday revealed that U.S. oil inventories fell by 3.8 million barrels in the week ending January 2, significantly exceeding expectations of a 1.2 million barrel decline.
This reduction was almost double the 1.9 million barrel draw reported the previous week, bolstering confidence that demand remains robust in the world’s largest fuel consumer.
Attention this week centers on several key U.S. economic reports, especially the December nonfarm payrolls data set to be released on Friday, which is expected to influence interest rate forecasts.
After months of rising tensions, the United States launched a major military operation in Venezuela on 3 January 2026, resulting in the capture of President Nicolás Maduro and his wife, Cilia Flores. U.S. President Donald Trump confirmed the operation, saying Washington would administer Venezuela until a stable transition government could be established. This marks one of the most dramatic U.S. interventions in Latin America in decades, with Maduro removed from power and taken into U.S. custody.
Maduro, long a focal point of U.S. sanctions and foreign policy pressure, was transported to the United States to face federal charges—such as narco‑terrorism and drug trafficking—filed in the Southern District of New York.
Venezuela holds the world’s largest proven oil reserves, and the sudden change in leadership carries significant geopolitical and economic implications well beyond its borders.
Why Did the US Capture Maduro?
Nicolás Maduro rose through the Venezuelan political system under socialist leader Hugo Chávez and became president in 2013. His time in power was widely criticized domestically and internationally, with opponents accusing him of suppressing dissent, restricting freedoms, and holding elections that lacked credibility.
Relations with Washington deteriorated sharply, especially under the Trump administration. U.S. officials accused Maduro’s government of involvement in drug trafficking and creating conditions that fueled migration toward the United States. They also branded elements of his regime—including the Cartel of the Suns—as a terrorist organization.
Tensions escalated in 2025 when the U.S. increased the bounty for Maduro’s arrest to $50 million and expanded military pressure in the region, including strikes on vessels the U.S. claimed were tied to drug smuggling.
On 3 January 2026, after months of military buildup and diplomatic pressure, U.S. forces launched a major operation in Venezuela—code‑named Operation Absolute Resolve—that resulted in the capture of Maduro and his wife. The U.S. government framed the intervention as a law‑enforcement action tied to longstanding criminal charges against Maduro, including narcoterrorism.
The United States claims that Venezuelan officials were engaged in government‑backed drug trafficking, asserting links with the so‑called Cartel of the Suns, which Washington has designated as a terrorist organization—a claim Maduro vehemently rejects. He argues that U.S. actions were aimed at forcing regime change and securing control over Venezuela’s vast oil riches.
Only hours before his detention, Maduro made his final public appearance as president when he hosted China’s special envoy, Qiu Xiaoqi, at the Miraflores Palace to discuss bilateral relations—an event that highlighted Caracas’s reliance on foreign partnerships for political support. Shortly after that meeting, explosions were reported across Caracas.
The event went beyond a simple arrest; it sent a broader strategic message, particularly to countries like China and Iran, undermining the belief that the U.S. would refrain from acting against governments supported by foreign adversaries.
Drill, Baby, Drill
A major strategic factor behind U.S. actions in Venezuela appears to be securing access to its vast energy resources. Venezuela sits on the largest proven oil reserves on the planet, with estimates from Wood Mackenzie suggesting roughly 241 billion barrels of recoverable crude, making it a uniquely significant player in global oil markets.
Top Countries by Proven Oil Reserves (Billion Barrels)
However, Venezuela’s track record of oil output underscores just how challenging it has been to tap into its vast reserves. In the late 1990s and early 2000s, the nation was capable of producing close to 3 million barrels per day—a level that made it one of the world’s top crude exporters. But political turmoil, labor strikes, and the restructuring of the oil sector under Hugo Chávez triggered a prolonged decline. The downturn was steepened further by U.S. sanctions starting in 2017, which restricted investment, technology, and exports, driving production down sharply. After bottoming out around 374,000–500,000 bpd during the worst of the crisis, output has only modestly recovered in recent years and remains in the range of approximately 800,000–900,000 bpd.
Historical Total Venezuelan Supply
Expectations that Venezuelan oil output could quickly rebound may overstate what’s realistically achievable. History shows that even after major disruptions, rebuilding oil production takes many years and vast investment. For example, Iraq needed almost a decade and well over $200 billion in capital to restore its output after the Iraq War, while Libya still has not returned to its pre‑2011 production levels.
Venezuela’s challenges are even more severe. Most of its reserves are extra‑heavy crude that demands upgrading and blending with diluents before it can be transported and refined, a costly and technical process. Years of underinvestment, international sanctions, the erosion of PDVSA’s workforce, and the deterioration of infrastructure have compounded these production hurdles. Pipelines, upgraders, and refineries have been left in poor condition, and limited access to modern technology continues to restrict any rapid recovery.
While PDVSA has claimed that facilities were not physically damaged in recent events—suggesting limited short‑term disruption—oil markets appear capable of absorbing this uncertainty for now. Inventories remain ample, and OPEC+ has signalled that its voluntary cuts of around 1.65 million bpd could be reversed if necessary to balance markets.
In a scenario where a pro‑U.S. government enables sanctions relief and attracts foreign investment, Venezuelan exports could gradually recover. But bringing production back to around 3 million bpd would take many years and substantial infrastructure upgrades. U.S. leadership has indicated that American oil companies would play a role in operating and developing Venezuela’s oil sector, though analysts note that the heavy crude’s technical challenges and investment risks remain significant.
Meanwhile, global oil markets are structurally tightening, with world consumption exceeding 101 million bpd driven by demand growth in the U.S., China, and India. Any short‑term impact on supply may show up as a modest increase in geopolitical risk premiums, but over time, the sidelined Venezuelan barrels—currently producing around 800,000–900,000 bpd—could eventually add supply and influence prices if output scales up gradually.
In addition to oil, Venezuela sits on a wealth of mineral resources. Large deposits of iron ore, bauxite, gold, nickel, copper, zinc and other metallic minerals are concentrated mainly in the southern Guayana Shield region. The country also ranks among Latin America’s largest holders of gold, and geological assessments identify significant iron and bauxite resources alongside reserves of coal, antimony, molybdenum and other base metals.
Despite this geological potential, commercial mining activity remains very limited. Most non‑oil mineral sectors contribute only a tiny fraction of Venezuela’s economic output, and substantial foreign investment has largely been absent, meaning much of the nation’s mineral wealth has yet to be developed into large‑scale production.
The Ongoing Economic Battle Between the United States and China
Competition between modern empires today is no longer about direct confrontation but about control over key inputs. Energy, metals, and critical materials form the foundation of the modern world. When leaders signal a willingness to secure these resources directly, markets should interpret this not as mere rhetoric, but as a concrete resource strategy.
The rivalry between the United States and China is fundamentally structural rather than ideological. The U.S. is rich in energy but dependent on imported metals and rare earths. China dominates metals processing but imports around 70% of its crude oil. Each side is strong where the other is vulnerable, and both seek to turn this imbalance into strategic advantage.
Control over energy flows also carries monetary implications. Influence over Venezuelan oil is not only about supply, but also about reinforcing the petrodollar and preventing the rise of the petroyuan.
There is also a regional dimension to this rivalry. China has steadily increased its presence in Latin America through infrastructure projects and commodity-backed financing. Recent U.S. moves indicate an effort to reassert dominance in the Western Hemisphere, compelling Beijing to compete on less advantageous terms. The Trump administration’s 2025 National Security Strategy elevated the region to a core priority, effectively reviving the logic of the Monroe Doctrine—rebranded as the “Donroe Doctrine.” The aim is to bring strategically important natural resources, especially critical minerals and rare earths, under U.S.-aligned corporate control while building a hemisphere-wide supply chain that reduces dependence on China.
Across much of South America, governments are edging closer to Washington, leaving Brazil increasingly isolated. This is significant given President Lula’s openly left-leaning stance and his consistent alignment with Russia, China, and Iran. Following Trump’s capture of Maduro, betting markets on Kalshi assign a 90% probability that the presidents of Colombia and Peru will be out of office before 2027. At the same time, President Trump has again stated that Greenland should become part of the United States, reinforcing a broader strategy centered on securing critical assets.
Which Assets Could Gain from “Nation Building” in Venezuela?
A political transition in Venezuela would most directly benefit assets tied to sovereign debt restructuring, energy infrastructure, and the oil supply chain.
Venezuelan bonds are currently priced at roughly 25–35 cents on the dollar, reflecting the impact of sanctions and ongoing legal uncertainty. Under a regime-change scenario, several analysts project potential recoveries in the 30–55 cent range, supported by the prospects of debt restructuring and the easing or removal of sanctions.
Ashmore continues to rank among the largest institutional holders of Venezuelan sovereign debt. Advisory firms such as Houlihan Lokey—financial adviser to the Venezuela Creditor Committee—and Lazard, a veteran of major sovereign restructurings (including Greece and Ukraine), would likely stand to gain from the sheer scale and complexity of any debt workout. In such processes, advisers typically earn success-based fees and function as the “picks and shovels” of restructuring. Venezuela’s debt structure is widely regarded as one of the most intricate ever assembled.
Reviving Venezuela’s oil industry would demand swift rehabilitation of aging infrastructure. Technip, which historically designed much of the country’s core oil facilities, is well placed to play a leading role given its proprietary expertise—particularly if emergency repairs are fast-tracked through sole-source or no-bid contracts. Graham Corporation, a supplier of vacuum ejector systems used in heavy-oil upgrading and refining, could also benefit, since Venezuela’s crude requires vacuum distillation to prevent it from solidifying into coke.
Before exports can meaningfully increase, Venezuela will need to import substantial volumes of diluent (such as naphtha or natural gasoline) to transport its heavy crude through pipelines. Targa Resources, operator of the Galena Park Marine Terminal in Houston—a major LPG and naphtha export hub—would be a natural beneficiary if Venezuela pivots back to U.S. diluent supplies, replacing current inflows from Iran.
The clearest corporate beneficiary of regime change and nation-building in Venezuela is Chevron (NYSE: CVX). Unlike other U.S. energy majors that exited the country, Chevron has maintained an on-the-ground presence. It retains the workforce, regulatory approvals (through OFAC), and operational assets—most notably Petroboscan and Petropiar—that position it to scale up production quickly. Exxon Mobil (NYSE: XOM) and ConocoPhillips (NYSE: COP), both of which hold legacy claims and arbitration awards stemming from past expropriations, could also regain market access or pursue compensation under a revised legal and political framework.
Refiners along the U.S. Gulf Coast—such as Valero Energy (NYSE: VLO), Phillips 66 (NYSE: PSX), and Marathon Petroleum (NYSE: MPC)—were purpose-built to handle heavy, sour crude like that produced in Venezuela. Since the imposition of sanctions, these companies have had to rely on costlier substitute feedstocks. A resumption of Venezuelan supply would reduce input costs and support refining margins, assuming end-product demand remains stable.
At the sector level, a significant increase in Venezuelan output would likely weigh on oil prices, which would be negative for crude producers but positive for consumer-oriented equities. Lower energy prices are inherently deflationary and could translate into lower bond yields—conditions that are generally supportive of risk assets, all else equal.
Note: This section is for analytical purposes only and does not constitute investment advice.
Venezuela: What Comes Next for the Economy and Markets?
In a characteristically Trump-like approach, President Trump initially stated that the United States would “administer” Venezuela during the transition period. U.S. officials later confirmed that approximately 15,000 troops would remain stationed in the Caribbean, with the option of further intervention if the interim authorities in Caracas failed to comply with Washington’s demands.
Venezuela’s Supreme Court subsequently named Vice President Delcy Rodríguez as interim president. A close ally of Maduro since 2018, Rodríguez previously oversaw much of the oil-dependent economy and the country’s intelligence structures, placing her firmly within the existing power framework. She signaled a willingness “to cooperate” with the Trump administration, hinting at a potentially dramatic reset in relations between the two long-hostile governments.
International observers, including the United Nations and the Carter Center, have concluded that Venezuela’s 2024 elections lacked legitimacy and fell short of international standards. Independently verified tally sheets reviewed by analysts indicated that opposition candidate Edmundo González secured around 67% of the vote, compared with roughly 30% for Maduro.
At the same time, María Corina Machado—Nobel Peace Prize laureate and a leading figure in Venezuela’s opposition—is expected to return to the country later this month and has said the opposition is ready to take power. President Trump, however, has publicly cast doubt on the breadth of her support among the Venezuelan population.
In this context, three potential scenarios appear likely, as outlined by Gavekal Research:
“Soft” Military Rule
In the near term, the most probable outcome is the continuation of the current power structure under Rodríguez and the armed forces. For this arrangement to endure, it would likely require a pragmatic shift toward U.S. priorities—embracing a more business-friendly approach and loosening ties with traditional partners such as Russia, China, and Iran. Washington may be willing to accept this scenario if it ensures political stability and reliable access to energy supplies.
Democratic Transition
A negotiated move toward civilian governance would hinge largely on how new elections are structured. Allowing participation from the Venezuelan diaspora could significantly reshape the results, whereas restricting voting to residents inside the country would be more likely to benefit factions linked to the existing regime.
“Libya Redux” (State Breakdown)
The most destabilizing scenario would involve the collapse of central authority, triggering internal military conflict and the proliferation of armed groups. Such an outcome would heighten the risk of civil strife, renewed migration pressures, and severe disruptions to oil production and global energy markets.
Oil prices tumbled in Asian trading on Wednesday after U.S. President Donald Trump said Venezuela would deliver tens of millions of barrels of crude to the United States, a development expected to significantly increase global supply. Prices were already under pressure earlier in the week, as Washington’s takeover of Venezuela fueled expectations of a broad easing of sanctions on the country’s oil sector—potentially releasing tens of millions of barrels back onto the market.
Despite elevated geopolitical risks adding a modest risk premium, oil prices stayed under pressure as markets grew increasingly concerned about a potential supply glut in 2026. Crude was already on track for its steepest annual decline in five years in 2025. Brent futures for March slid 1% to $60.11 a barrel at 20:13 ET (01:13 GMT), while U.S. benchmark WTI dropped 1.1% to $56.29 a barrel.
Venezuela to send 30–50 million barrels of crude to the United States, Trump says
In a post on social media, Trump said Venezuela would transfer between 30 and 50 million barrels of oil to the United States, with Washington planning to sell the crude at prevailing market prices. He added that the proceeds from the sales would be managed by him as U.S. president, stating that the funds would be used to serve the interests of both Venezuela and the United States.
The announcement follows just days after U.S. forces detained Venezuelan President Nicolas Maduro, when Trump said Washington was taking control of the country and planned to open up its oil sector. Oil prices initially fell after Maduro’s capture, as markets anticipated that a potential easing of U.S. sanctions on Venezuela could unleash large volumes of crude onto global markets. Trump’s actions since then suggest that this outcome is increasingly likely.
However, analysts cautioned that any reopening of Venezuela’s energy industry could take longer than expected, citing risks of political instability and the constraints of the nation’s aging infrastructure. Data from maritime analytics firm Kpler also indicated that a near-term increase in Venezuelan output is unlikely due to limited domestic storage capacity.
Russia-Ukraine ceasefire draws attention as U.S. backs security guarantees for Kyiv
Oil markets were also tracking any fresh developments in talks on a Russia–Ukraine ceasefire after the United States on Tuesday endorsed a largely European-led coalition that pledged to provide security guarantees for Kyiv.
The U.S. commitment was made at a Paris summit aimed at reassuring Ukraine in the event of a truce with Moscow. Washington also said it was prepared to help monitor and verify any ceasefire should an agreement be reached. However, Russia has so far shown limited willingness to engage in a ceasefire, with fighting between the two sides continuing as the war moves toward its fifth consecutive year.
Even so, any prospective ceasefire between Russia and Ukraine could ultimately lead to a rollback of U.S. sanctions on Moscow, allowing additional Russian oil to return to the market. Such a development would also reduce the geopolitical risk premium embedded in crude prices.
U.S. President Donald Trump said on Tuesday night that Venezuela’s interim government would transfer tens of millions of barrels of oil to the United States, with the proceeds from sales to be managed by Washington. In a social media post, Trump said Caracas would hand over between “30 and 50 million barrels of high-quality, sanctioned oil,” which would be sold at market prices. He added that the revenue would be overseen by him as president to ensure it benefits both the Venezuelan and U.S. people, and noted that he had directed Energy Secretary Chris Wright to implement the plan immediately.
The proposed arrangement could redirect Venezuelan oil exports away from China while helping state-run PDVSA avoid deeper production cuts, following reports that Washington and Caracas were in talks over a supply agreement. The announcement comes days after U.S. forces captured President Nicolas Maduro, heightening political uncertainty in Venezuela. Maduro’s vice president, Delcy Rodriguez, was sworn in as interim leader this week and has signaled her willingness to cooperate with Washington.
Trump said the United States would oversee Venezuela until a permanent leader is elected and would also assume control of the country’s aging oil sector. Following the announcement, oil prices fell, as a U.S. takeover could bring large volumes of crude to market and boost supply. March Brent futures dropped 2%.
Dogecoin rose another 2% following a 4% rebound on Sunday, marking its fifth consecutive day of gains.
Shiba Inu paused after surging nearly 12% on Sunday, having broken out of a falling channel formation.
Pepe is approaching its 200-day EMA, with bulls eyeing a breakout after a 77% rally over the past four days.
Meme coins including Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) are leading the broader crypto market rally, fueled by the U.S. cross-border operation to detain Venezuelan President Nicolás Maduro. Dogecoin has extended its advance for a fifth straight session, while SHIB and PEPE are taking a brief pause. Despite this consolidation, the technical outlook for the major meme coins remains bullish.
Venezuela is reportedly shifting from the petrodollar to cryptocurrencies like Tether’s USDT stablecoin to settle crude oil sales, with an estimated value between $10 billion and $15 billion. It’s believed that Maduro converted USDT into Bitcoin (BTC) to prevent his wallet from being frozen.
Along with a $2 billion gold-for-Bitcoin swap conducted between 2018 and 2020 and the seizure of BTC mining assets, Venezuela’s shadow reserve is estimated to hold around 600,000 BTC.
If the US Strategic Bitcoin Reserve seizes or absorbs Venezuela’s BTC holdings, it would effectively reduce Bitcoin’s available supply, potentially triggering a surge in demand. The current market recovery appears to reflect anticipation of this possible supply constraint.
Dogecoin Gains Bullish Momentum Above $0.15
Dogecoin rose 2% on Monday, building on Sunday’s 4% gain. The dog-themed meme coin has surpassed its 50-day Exponential Moving Average (EMA) at $0.14339 and is trading above the key $0.15 level.
This recovery follows a breakout rally from a descending wedge pattern on the daily logarithmic chart. The next target for Dogecoin is the 200-day EMA at $0.18202, which aligns with a resistance zone between $0.18100 and $0.18500.
Momentum indicators show strong buying pressure: the Relative Strength Index (RSI) stands at 65, leaving room before overbought territory, while the Moving Average Convergence Divergence (MACD) continues to climb with green histogram bars, signaling growing bullish momentum.
If DOGE slips below the key support near $0.14399, it could negate the recent breakout and expose the meme coin to further downside pressure, potentially testing the next psychological floor around $0.13 or lower. Technical breakdowns below critical support often increase the risk of deeper corrections, as previous analyses have shown DOGE facing renewed bearish momentum if it fails to hold near support levels.
Shiba Inu Pauses After Four-Day Rally, Holding Above 50-Day EMA
Shiba Inu surged nearly 12% on Sunday, breaking above the resistance trendline formed by the October 13 and November 11 highs. As of Monday, SHIB has pulled back slightly, down over 1%.
If the recovery continues, Shiba Inu could target the 200-day EMA at $0.00001065.
Similar to Dogecoin, daily momentum indicators show strong bullish momentum for SHIB. The RSI stands at 65, approaching the overbought zone, while the MACD has crossed above the zero line with increasing green histogram bars, signaling growing upward momentum.
On the downside, if SHIB falls below the 50-day EMA at $0.00000821, it would invalidate the recent breakout, potentially exposing the coin to a drop toward the October 10 low of $0.00000678.
Pepe Eyes Breakout Above 200-Day EMA
Pepe slipped nearly 2% on Monday after soaring almost 18% on Sunday, pausing its four-day rally that has surged over 77%. This pullback reflects resistance near the 200-day EMA at $0.00000749.
If PEPE breaks above this level, the rally could extend toward the September 25 low at $0.00000886.
The RSI stands at 79, indicating overbought conditions and potentially unsustainable buying pressure. However, the rising MACD suggests continued bullish momentum.
On the downside, a potential reversal in PEPE may test the former resistance, now support zone, around $0.00000650.
The removal of Venezuela’s current leadership would likely signal a sharp shift in Washington’s stated objectives—from a focus on counter-narcotics pressure to a far more ambitious agenda: unlocking one of the world’s largest oil reserves and reopening the country to U.S. energy companies.
“The oil business in Venezuela has been a bust—a total bust—for a long period of time,” U.S. President Donald Trump told reporters on Saturday.
“We’re going to have our very large United States oil companies—the biggest anywhere in the world—go in, spend billions of dollars, fix the badly broken oil infrastructure, and start making money for the country.”
The central question for Trump’s administration is whether political change alone would be sufficient to revive an industry hollowed out by decades of mismanagement, corruption, and chronic underinvestment.
On paper, Venezuela’s oil potential is vast. Government figures put proven reserves at more than 300 billion barrels, the largest in the world, consisting largely of heavy crude prized by refiners along the U.S. Gulf Coast and in parts of Asia.
Analysts note that this heavy crude complements U.S. shale production, which is typically lighter and less suited to certain refinery configurations. In theory, Venezuela’s reserves could once again play a meaningful role in global energy markets.
In practice, however, the obstacles are formidable. Venezuela currently produces less than one million barrels per day—a fraction of its output two decades ago. Infrastructure has deteriorated severely, skilled workers have fled the country, and oil fields, pipelines, ports, and refineries would require massive capital investment merely to restore reliable operations.
Even under optimistic scenarios, years of rebuilding would be required before production could rise meaningfully. Market conditions add another layer of complexity: global oil supplies remain ample, and prices below $60 a barrel reduce the incentive for large-scale, high-risk investment abroad.
U.S. producers must therefore weigh whether capital is better deployed in stable domestic basins rather than in a country with a long history of expropriation and contract disputes.
Legal and institutional reform would also be indispensable. Venezuela would need to overhaul laws governing private investment, restructure roughly $160 billion in sovereign and quasi-sovereign debt, and resolve outstanding arbitration claims stemming from past nationalizations.
Without clear property rights and predictable regulatory frameworks, international oil companies are unlikely to commit billions of dollars, regardless of political change.
Security and governance challenges remain unresolved as well. Removing a leader does not automatically produce stability, and companies will wait to see whether a transitional government can maintain order, protect assets, and establish credible authority across the country.
The scale of reconstruction required extends far beyond oil extraction, encompassing financing, currency stabilization, and the rebuilding of core state institutions.
In that sense, unlocking Venezuela’s oil is ultimately less a question of geology than of politics, economics, and time.
THE ETERNAL SOVEREIGN 