US special operation in Venezuela: how Maduro’s arrest affected the global oil market
Global oil prices fell after a US raid in Venezuela that detained President Nicolas Maduro, as markets reacted to growing uncertainty about the future of some of the world’s largest oil reserves.
This is reported by the Financial Times.
On Monday, January 5, the international benchmark Brent fell 0.5 percent to $60.44 per barrel. The American benchmark WTI fell 0.6 percent to $56.97 per barrel.
Although Venezuela currently produces less than 1 percent of the world’s oil, its proven reserves account for about 17 percent of the world’s total. This preserves the country’s potential to significantly influence the global oil market.
Analysts say US intervention could cause a short-term price drop as additional oil supplies are expected, but the glut of crude oil on the market remains a key risk.
“Traders are tired of geopolitical risks that don’t actually lead to supply disruptions,” said MST Financial analyst Sol Kavonik.
Despite the events in Venezuela, OPEC+ countries have not changed their strategy. Saudi Arabia, Russia and the United Arab Emirates have agreed to extend the pause in increasing production until at least April.
At the same time, the blockade of Venezuela limits imports of raw materials for blending heavy oil. This temporarily reduces production, but in the medium term, traders expect it to increase.
By the way, US Secretary of State Marco Rubio will temporarily lead the Venezuelan administration after the arrest of President Nicolas Maduro . This creates a new governance structure and maintains American control over the country’s oil assets and security.
As a reminder, on January 3, US President Donald Trump ordered strikes on targets inside Venezuela. The country’s government declared a state of emergency due to the American attack. Trump later announced that Venezuelan leader Nicolas Maduro and his wife had been captured and taken out of the country .
Also, the day before, it became known that the US had completed the operation in Venezuela , and Maduro himself will be tried for criminal offenses. Thus, the Venezuelan leader and his wife were charged with conspiracy with the purpose of “narco-terrorism” and with the purpose of “ importing cocaine .”
Instead, Venezuelan Vice President Delcy Rodriguez publicly called on the United States to release Nicolas Maduro and his wife . She also stated that the country would never become a colony of any state and called on citizens to unite.
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