Oil prices extended their decline after the removal of Nicolas Maduro opened the door for Venezuela to revive its battered crude industry and potentially bring more supply onto global markets.
Brent crude was last down 1.3%, slipping below $60 a barrel, while US benchmark West Texas Intermediate fell 1.5% to $56.50.
According to Jim Reid of Deutsche Bank, investors are weighing short-term disruption against longer-term supply gains. He said markets are debating “the extent to which any short-term oil supply disruption from the upheaval will end up being outweighed by a longer-term supply boost from higher Venezuelan production”.
Venezuela holds the world’s largest proven crude reserves, accounting for around 17% of the global total. Yet years of mismanagement and underinvestment have taken a heavy toll, with oil output in 2023 roughly 70% lower than in 2013.
Mr Reid argued that the prospect of a sustained recovery in production could act as a structural drag on prices. That view was reinforced over the weekend by comments from Donald Trump, who said US oil companies would “go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country”.
US oil giants jump on Trump’s billions pledge
US oil stocks surged in premarket trading after Donald Trump pledged a dramatic return of American energy companies to Venezuela, promising billions of dollars in investment and a revival of the country’s oil industry.
Chevron jumped by as much as 10%, while Exxon Mobil gained 3.5%, as investors reacted to comments suggesting the US would effectively take control of crude production in the South American nation.
Speaking over the weekend, Mr Trump said US oil companies would move back into Venezuela to rebuild its long-neglected petroleum infrastructure. “They’re going to spend billions of dollars and they’re going to take the oil out of the ground,” he said, fuelling expectations of a long-term boost to supply—and profits—for US energy giants.
