Oversupply issues would worsen if more Venezuelan oil entered the market. Following the capture of Venezuelan leader Nicolas Maduro by a US military operation, oil prices dropped on Monday. Venezuela is home to the largest proven crude reserves in the world. Concerns about oversupply would be exacerbated by more Venezuelan oil entering the market, which would further strain already declining oil prices. During Asian morning trading, West Texas Intermediate was down 0.35 percent at $57.12 and Brent Crude was down 0.21 percent at $60.62 a barrel, both off previous lows.
Early on Saturday morning, US soldiers launched an attack on Caracas, destroying military targets and removing Maduro and his spouse to face criminal accusations of drug trafficking in New York. According to US President Donald Trump, the US will now “run” Venezuela and dispatch US businesses to repair its severely damaged oil infrastructure. Venezuela now pumps about one million barrels per day, down from about 3.5 mb/d in 1999, following years of underinvestment and sanctions. However, experts note that significantly increasing Venezuela’s oil production won’t be simple or quick, in addition to other significant concerns regarding the country’s future. “Any recovery in production would require substantial investment given the crumbling infrastructure resulting from years of mismanagement and underinvestment,” Giovanni Staunovo, an analyst at UBS, told AFP.
Investing now is particularly unappealing: despite major growth obstacles like Trump’s tariff war and the ongoing turmoil in Ukraine, oil prices dropped in 2025 due to a glut of supply.
