In a dramatic operation, the US military has seized the Venezuelan president Nicholas Maduro. Maduro and his wife now face charges in the US. It is highly unclear what happens next in Venezuela. President Trump has stated that the US will now ‘run’ Venezuela, but how this will work is unclear.
The impact on oil supply could go in either direction
Our analysis of the reported US operation to seize the Venezuelan president Nicolás Maduro underlines a core feature of commodity geopolitics – near-term disruption risk can rise at the same time as longer-term supply upside becomes more plausible. Markets tend to react first to immediate uncertainty, but the bigger question is whether Venezuela becomes “investable” again – and what this could mean for future crude balances and the geopolitical risk premium.
Why the near term is about disruption, not recovery
The proposed approach – Washington “steering” policy remotely – creates a complex operating environment. Even if senior officials engage, control over domestic hardliners and security services may be limited, while policy direction could remain contested.
For oil flows, this matters because Venezuela’s export chain is highly sensitive to interruptions. Exports rely on stable access to key inputs and infrastructure, as well as functioning shipping, insurance and payment channels. When any link weakens, exports can slow quickly and production may be forced to divert oil to storage instead of export, or even shut down completely. In our view, the removal of a leader does not automatically unlock supply – it can increase the probability of short, sharp disruptions before any upside emerges.
Heavy crude is where stress shows first
With output concentrated in heavier grades, the market impact can show up less in outright benchmark prices and more in supply-demand mismatches at grade level– where refinery configurations and blending requirements matter. This can create episodic volatility in differentials and refining margins even if global supply-demand is not materially altered.
The medium-term hinges on “investability”
Over time, the upside case depends less on geology and more on above-ground conditions– credible contracts, enforceable property rights, durable sanctions relief, and the ability for international capital to operate with confidence. Even then, early gains would likely come from better utilisation of existing assetsand debottlenecking rather than an instant, large-scale rebuild.
CRU helps clients translate political events into practical market implications – identifying which parts of the value chain are most exposed, what needs to be true for supply to recover sustainably, and what to watch to separate headlines from a durable shift. Contact us for more information.
