Executive Summary

Key insights and market outlook

Crude oil prices showed mixed movements on Monday (5/1/2026) following the US military operation that captured Venezuelan President Nicolas Maduro, creating uncertainty about global oil supply. Brent crude dropped 0.4% to $60.52/barrel ¹

while earlier it had surged 0.9% to $61.30/barrel ² as markets assessed potential supply disruptions. The situation in Venezuela, holding the world's largest oil reserves, has significant implications for global energy markets.

Full Analysis

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Deep Dive Analysis

Crude Oil Market Reacts to Venezuela Political Developments

Initial Market Reaction and Price Movements

The crude oil market experienced significant volatility on Monday, 5 January 2026, as news emerged of the US military operation targeting Venezuelan President Nicolas Maduro ³

. In the early trading session, Brent crude surged 0.9% to $61.30/barrel ² while West Texas Intermediate (WTI) rose 1.1% to $57.96/barrel ². However, as the day progressed, prices pulled back with Brent crude closing down 0.4% at $60.52/barrel ¹ and WTI declining 0.4% to $57.11/barrel ¹.

Market Sentiment and Supply Concerns

The initial price increase was driven by concerns over potential supply disruptions from Venezuela, which holds approximately 17% of global oil reserves ⁴

. The US embargo on Venezuelan oil remained in place despite the political developments ⁴. Market participants were weighing the potential impact on oil production and export capabilities against the backdrop of existing global supply conditions.

Economic and Geopolitical Implications

While some analysts believe the immediate economic impact might be limited, there are concerns about broader geopolitical consequences ³

. The situation in Venezuela could potentially affect global energy security and influence oil production strategies. According to Neil Shearing, Chief Economist at Capital Economics, "The economic impact is likely limited in the short term, but political and geopolitical consequences could be more far-reaching" ³.

Future Outlook

The long-term implications of the Venezuelan political crisis on oil markets remain uncertain. Some analysts project that if production resumes, Venezuelan oil supply could increase in the coming years, potentially putting downward pressure on global oil prices ⁴

. The market will continue to monitor developments in Venezuela and their impact on global energy markets.

References