Our view on oil prices after Maduro is deposed
We’ve revisited our oil price assumptions after the news from Venezuela.
On the morning of Jan. 3, 2026, US forces deposed Venezuelan leader Nicolas Maduro. US President Donald Trump indicated the US will run Venezuela until there can be a “proper transition” and has highlighted his desire to substantially increase US private investment in Venezuela’s oil infrastructure.
Why it matters: Venezuela’s vast oil reserves are thought to be the largest in the world, with roughly 300 billion barrels of reserves, exceeding Saudi Arabia, based on third-party estimates. Still, its production output has fallen to less than one-third of its production 50 years ago (not even 1% of global supply).
- The Venezuelan government nationalized the oil industry in the 1970s. Former President Hugo Chavez aggressively expanded seizures of oil assets nearly 20 years ago. Oil production has materially declined from years of mismanagement and paltry infrastructure investments.
- We think it’s unclear how the US administration will attract the investment it currently seeks anytime soon. Operators remain cagey following recent memory of these asset seizures—reluctance only heightened by the uncertainty of who will eventually govern Venezuela.
The bottom line: We don’t plan to alter our fair value estimates or our midcycle oil price estimates of Brent $65/bbl and WTI $60/bbl. While significant Venezuelan supply increases to global markets could be bearish for our 10-year forecast, we think it will take years for supply to meaningfully increase.
- Venezuela will require years of large capital investments to modernize its infrastructure. We don’t presently expect Venezuela will attract that level of investment until lower-cost production like US shale peaks. While slowing, it still has some runway.
- We apply futures pricing for our assumed near-term pricing. While we speculate we could see some upward price movement, we think it’ll be short-lived. Markets likely priced in Venezuelan supply disruption, and OPEC+ actions and seasonal demand weakness set up a supply glut.
