TOKYO: Oil costs fell on Monday (Jan 5) after a United States navy operation seized Venezuelan chief Nicolas Maduro, whose nation has the world’s largest confirmed crude reserves.
Increased volumes of Venezuelan oil coming into the market would add to oversupply considerations and put additional stress on oil costs, which have fallen in latest months.
In morning commerce in Asia, Brent Crude was down 0.21 per cent at US$60.62 per barrel whereas West Texas Intermediate was off 0.35 per cent at US$57.12, each off earlier lows.
US forces attacked Caracas within the early hours of Saturday, bombing navy targets and spiriting away Maduro and his spouse to face federal narcotrafficking costs in New York.
US President Donald Trump has mentioned that the US will now “run” Venezuela and ship US firms to repair its badly dilapidated oil infrastructure.
After years of under-investment and sanctions, Venezuela at the moment pumps round a million barrels per day, down from round 3.5 million barrels per day in 1999.
But analysts say that alongside different main questions on Venezuela’s future, considerably lifting its oil manufacturing won’t be straightforward or fast.
“Any recovery in production would require substantial investment given the crumbling infrastructure resulting from years of mismanagement and underinvestment,” UBS analyst Giovanni Staunovo instructed AFP.
Investing at this time additionally holds little attraction: oil costs are weighed down by a provide glut and fell in 2025 regardless of vital development headwinds like Trump’s tariff battle and the continued battle in Ukraine.