Oil slips as markets shrug off Venezuela shock
Shafaq News
Oil prices drifted lower on Monday, as adequate global supplies offset concerns about supply disruptions after the United States captured Venezuelan President Nicolas Maduro in an audacious raid over the weekend.
Brent crude futures fell 21 cents, or 0.4%, to $60.54 a barrel by 0452 GMT, while U.S. West Texas Intermediate crude was 28 cents, or 0.5% lower, at $57.04 a barrel.
The key oil benchmarks were volatile in early Asian trade, opening lower but inching up shortly after, only to pare gains and turn red again as investors assessed the political upheaval in the OPEC member nation and the impact on oil supply.
President Donald Trump said Washington would take control of the oil-producing nation and that the U.S. embargo on all Venezuelan oil remained in full effect, after detaining Maduro in New York on Sunday.
In a global market with plentiful oil supply, analysts said any further disruption to Venezuela's exports would have little immediate impact on prices.
"We see ambiguous but modest risks to oil prices in the short-run from Venezuela depending on how U.S. sanctions policy evolves," Goldman Sachs analysts led by Daan Struyven said in a January 4 note, keeping its 2026 oil price forecasts unchanged.
Top officials in Maduro's government, who have called the detentions of Maduro and his wife Cilia Flores a kidnapping, are still in charge and vowed to stay unified behind Maduro, but a regime change could suppress prices, analysts say.
"A regime change in Venezuela would immediately represent one of the largest upside risks to the global oil supply outlook for 2026–2027 and beyond," analysts at JP Morgan said on Monday.
The U.S. strike on Venezuela to seize President Maduro inflicted no damage on the country's oil production and refining industry.
Helima Croft, RBC Capital's head of commodities research, said full sanctions relief could unlock several hundreds of thousands of barrels per day of production.
Trump said on Sunday that the United States might launch a second military strike on Venezuela if remaining members of the administration do not cooperate with his efforts to get the country "fixed."
"All bets are off in a chaotic change of power scenario like what occurred in Libya or Iraq," Croft added.
The Organization of the Petroleum Exporting Countries and their allies, together called OPEC+, decided to maintain their output on Sunday.
Trump also raised the possibility of further U.S. military interventions in Latin America, and suggested Colombia and Mexico could also face military action if they do not reduce the flow of illicit drugs to the United States.
Analysts are also watching Iran's reaction after Trump threatened on Friday to intervene in a crackdown on protests in the OPEC producer, ratcheting up geopolitical tensions.
(Reuters)
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