By Florence Tan
Singapore — Crude output in Venezuela is set to increase over a period of time after the dramatic US strike and capture of its president, likely raising global supply and weighing on prices longer-term, oil analysts said.
American forces seized Venezuelan President Nicolas Maduro from Caracas over the weekend. US President Donald Trump said Washington will take control of the oil-producing nation and the US embargo on all Venezuelan oil remains in full effect.
The Opec member holds about 17% of global oil reserves, or 303-billion barrels, ahead of Opec leader Saudi Arabia, according to the London-based Energy Institute.
Venezuela was producing as much as 3.5-million barrels per day (bpd) of crude in the 1970s, which at the time represented over 7% of global oil output. Production fell below 2-million bpd during the 2010s and averaged 1.1-million bpd last year, or just 1% of global production.
JPMorgan analysts led by Natasha Kaneva said in a note that with a political transition, Venezuela could raise oil production to between 1.3-million and 1.4-million bpd within two years and potentially reach 2.5-million bpd over the next decade, up from about 800,000 bpd at present.
“These dynamics are currently not reflected in the back end of the oil futures curve,” the note added.
Goldman Sachs analysts led by Daan Struyven said in a January 4 note that any recovery in production is likely to be gradual and require substantial investment. The analysts estimated a $4 per barrel downside to 2030 oil prices in a scenario in which Venezuela crude production rises to 2-million bpd.
In the short term, Venezuela’s oil production outlook this year will depend on how US sanctions policy evolves, the Goldman analysts said. “We see ambiguous but modest risks to oil prices in the short run from Venezuela, depending on how US sanctions policy evolves.”
Goldman’s 2026 oil price forecasts remained unchanged, with Brent’s average at $56 and West Texas intermediate at $52 a barrel while Venezuela’s 2026 oil production is forecast to stay flat at 900,000 barrels per day.
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