Analysts informed CNBC on Saturday that the removal of President Donald Trump from office in oil-abundant Venezuela is not expected to surprise energy markets in the immediate future.
Though the magnitude of the American strike was unforeseen, markets had already factored in a dispute with Venezuela that would affect oil exports, noted Arne Lohmann Rasmussen, chief analyst and research leader at A/S Global Risk Management.
Venezuela, a founding member of OPEC, possesses the most substantial confirmed oil reserves globally. However, currently, the South American nation produces under one million barrels of oil per day, accounting for less than 1% of world oil output, according to Rasmussen.
Rasmussen stated that Venezuela exports only about half of its production, roughly 500,000 barrels. The tension also arises as the international oil market faces an oversupply and relatively weak demand, a trend typical in the initial quarter of the year, he added.
He estimated that Brent crude prices would likely increase by around $1 to $2, or potentially less, when futures trading resumes Sunday night. He anticipated that Brent would settle lower next week compared to its closing price on Friday, which was $60.75.
“Although this constitutes a significant geopolitical development that one would typically expect to elevate oil prices,” he stated, “ultimately, there remains an excess of oil in the market, which is why prices won’t surge.”
Analyst Bob McNally from Rapidan Energy mentioned that he had informed clients prior to the weekend that roughly a third of Venezuela’s oil output was jeopardized. While he does not foresee a total halt in Venezuela’s production, he conveyed to CNBC that it would not represent a considerable threat to oil markets in the near term.
The oil market in 2025 experienced its largest annual drop in five years. The global benchmark Brent decreased about 19% over the past year, whereas U.S. crude oil saw a nearly 20% decrease. The market has faced downward pressure as OPEC+ increased production following years of curtailments. The U.S. also reached a record high production of slightly over 13.8 million barrels daily.
Prices may continue to decline as the regime change enhances the potential to ultimately increase oil production in Venezuela, analysts indicated to CNBC.
Saul Kavonic, heading energy research at MST Financial, estimated that exports could rise to 3 million barrels in the medium term if a new Venezuelan administration led to the removal of sanctions and the reentry of foreign investors.
“If anything, the upcoming future of Venezuela could exert a bearish influence on the market, since the only way is up,” remarked energy consultant David Goldwyn, a former senior State Department energy official during the Obama administration.
Currently, the ban on Venezuelan oil remains in place, Trump stated at a press briefing on Saturday. He also noted that U.S. oil firms will invest billions in revitalizing Venezuela’s energy infrastructure. Trump did not specify which companies would invest or in what manner, nor did he clarify how the U.S. would temporarily manage Venezuela “with a group.”
Goldwyn expressed uncertainty over whether U.S. oil firms would commit to investment due to the unpredictability surrounding the interim and future governments in Venezuela.
“All insights gained from government transitions in Iraq, Afghanistan, and other nations indicate that transitions pose challenges,” he remarked. “No corporation will be eager to pledge billions for a long-term venture until they ascertain the terms. And those terms remain unknown until the governmental situation is evident.”
Goldwyn added that firms, including Exxon Mobil, are still awaiting the reimbursement from Venezuela’s national oil corporation, Petróleos de Venezuela S.A. (PDVSA).
According to McNally from Rapidan Energy, it’s a complex situation for U.S. oil enterprises. He noted that oil producers have not forgotten their expulsion from Venezuela in the early 2000s when the country seized the assets of international oil companies. Nonetheless, he added, if sanctions were lifted, accessing the globe’s largest oil reserves would be “tempting” for U.S. oil companies.
However, substantial investments and decades would be required, McNally stated. Whether the endeavor is worthwhile boils down to one crucial query: Does the world need that volume of oil?
“Until late last year, the prevailing market belief was that oil demand would cease growing within four years. This change is attributed to electric vehicles and fuel efficiency standards alongside climate change initiatives,” McNally explained.
Yet as the U.S. and other countries, such as China and Canada, relax their climate regulations and electric vehicle sales decline, the notion of investing in Venezuela appears significantly more appealing.
“Suddenly, there’s a realization: ‘Wow, we are going to require more oil,'” he remarked.
— Additional reporting contributed by CNBC’s Victor Loh
