US Strike in Venezuela: Impact on Gas Prices and Oil Markets

Following a significant US military operation targeting Caracas, Venezuelan President Nicolás Maduro has been captured. This event raises questions about the future of Venezuela, particularly regarding its vast oil reserves. The country holds approximately 303 billion barrels of crude oil, making it home to about 20% of the global reserves, as reported by the US Energy Information Administration (EIA).

US Strike and Oil Market Impact

With oil futures not trading over the weekend, the immediate effects on oil prices remain uncertain. Analysts are particularly focused on how the situation will evolve in the coming days. Phil Flynn, a senior market analyst at the Price Futures Group, emphasizes the potential historic implications for the oil market due to Maduro’s removal. He highlights that the Maduro and Hugo Chavez administrations have severely affected the Venezuelan oil industry’s operations.

The Political Landscape

Venezuelan Vice President Delcy Rodríguez, a member of the long-standing socialist bureaucracy, may ascend to leadership. However, the United States recognizes Edmundo Gonzalez, a figure in exile, as the legitimate president. María Corina Machado, a notable political figure who won the 2025 Nobel Peace Prize, supports this recognition. The next crucial days will determine whether the military will align with the opposition or exacerbate tensions.

State of Venezuela’s Oil Production

• Current oil production: Approximately 1 million barrels per day
• Global crude production share: About 0.8%
• Historical production: 3.5 million barrels per day before Maduro’s leadership in 2013

Venezuela’s oil output has dramatically declined due to a combination of international sanctions, economic instability, and inadequate investment in infrastructure. The EIA cites deterioration in Venezuela’s energy facilities as a significant factor in reduced production capacity.

Market Reactions and Future Prospects

Oil prices have remained stable, partly due to a global oversupply situation. The Organization of the Petroleum Exporting Countries (OPEC) has increased production, while demand is faltering in light of global economic challenges. Although US oil prices briefly surpassed $60 per barrel during earlier tensions, they have since decreased to around $57.

Flynn notes that even if Venezuelan oil becomes unavailable, the global market is likely to absorb the loss without dramatic price surges, as production from other countries can compensate for it. He expresses concern that the type of oil found in Venezuela, heavy sour crude, requires specialized refining capabilities that many international firms possess but have been barred from utilizing in the country.

Potential Benefits of Venezuelan Oil

Unlocking Venezuela’s oil resources could significantly benefit the US. Its geographical proximity reduces transportation costs, and its heavy oil is advantageous for specific refinery outputs. Flynn suggests that if US companies can return to rebuild the oil sector, this could lead to advantageous changes in the global oil market.