Oil Prices Dip as Markets React to Trump’s Venezuela Moves

By Staff, Agencies

Oil prices dropped as investors reacted to the US capture of the Venezuelan president, Nicolas Maduro, while a former Chevron executive seeks to raise $2bn for Venezuelan oil projects.

Brent crude fell 0.7% to $60.33, and West Texas Intermediate crude dropped 0.54% to $56.01 after Trump’s pledge to unlock Venezuela’s oil reserves, later recovering slightly to a 0.1% loss.

Venezuela produces just 1% of global oil due to underinvestment, US sanctions, and a naval blockade, yet holds 17% of the world’s crude oil reserves, according to the US Energy Information Administration.

Trump’s intervention may worsen the supply glut as he pledges US oil companies will invest billions to fix Venezuela’s oil infrastructure.

So far none of the major US oil companies have commented on Trump’s claim they are prepared to spend billions to rebuild the Venezuelan oil industry, but former Chevron exec Ali Moshiri is raising $2bn for Venezuelan oil projects.

Moshiri, former head of Chevron’s Latin American operations, said his Amos Global Energy Management fund is ready to invest in Venezuelan assets, with a $2bn placement memorandum and targets identified. “We have been anticipating this breakthrough for a while,” he said.

Kathleen Brooks, research director at XTB, said the oil price drop could be “short-lived” as investors assess how long it’ll take for Venezuelan oil to impact the market. She noted that Venezuela needs investments to upgrade infrastructure, drill new wells, and build refineries, but turning the country around could take until 2030.

Brooks also highlighted that Venezuela once pumped nearly 3.5 million barrels a day at its peak, far above the current 1 million.

John Browne, former BP CEO, told BBC Radio 4 that reviving Venezuela’s oil production would take “a tremendous amount of skill, investment and time.” “It’s a very long-term project,” he added, noting it could see a quick boost or potentially decline during reorganization.

Political disruption has spurred a rally in Venezuela’s bond market, with debt rising as traders anticipate a regime change.

A Venezuelan government bond maturing in 2027 has surged from 31.5p to over 40p on the dollar, while a 2022 bond has risen from 31.5p to 34p, according to Deutsche Borse data.

China’s top financial regulator has asked banks to report their exposure to Venezuela amid potential shocks, Bloomberg reports.

Despite weekend geopolitical upheaval, OPEC+ maintained its strategy, agreeing to keep production increases paused until at least April.

Gold rose 2% to $4,413.93 on Monday, with silver gaining 3.5%, as both metals benefit from global uncertainty. Last year, they hit record highs due to economic instability, interest rate cuts, and central bank bullion purchases.

The price of bitcoin has also been rising on geopolitical uncertainty, increasing by 1.1% to $92,504 on Monday.

Asian markets posted their strongest start since 2012, with South Korea’s Kospi hitting a record high, up 3%. In London, the FTSE 100 briefly topped 10,000 before trading 0.2% higher.