WTI oil prices fell by more than 1.5% in early Monday trading and are currently hovering around $56.40 per barrel. The initial reaction from the financial markets to the US intervention in Venezuela has been one of cautious optimism, reflecting expectations that the removal of the Venezuelan president could lead to a political realignment towards the US sphere of influence. In the short term, particularly with regard to oil exports, the outlook appears to be largely one of business as usual. Venezuela holds around 17% of the world’s proven oil reserves, but in recent years its capacity to extract and process crude has deteriorated significantly. Current output is estimated at below one million barrels per day, with roughly half exported — accounting for less than 1% of global supply. Against this backdrop, and considering that, even before the weekend, analysts were forecasting an oversupply in global oil markets in 2026, the current price decline is not surprising, considering the medium-term prospect of more Venezuelan oil entering the global market.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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