What the Venezuela regime change means for oil production, crude and product markets

Nicolás Maduro, then-president of Venezuela, was taken by US military forces over the weekend and is now being held in the US awaiting trial on criminal charges. The political situation in Venezuela is in limbo with the appointment of Maduro's vice president, Delcy Rodríguez, now in office in Caracas.

US President Donald Trump intends the US to "run the country" until it can be safely handed over in a proper transition. US Secretary of State Marco Rubio indicated this refers to the US wielding economic leverage to influence regime change and policy, as opposed to imposing actual US governance. Still, it is unclear how the US will effectively exert influence over Venezuela without a physical presence. The naval blockade remains in place, as do US sanctions on Venezuela.

Alan Gelder, SVP Refining, Chemicals & Oil Markets at Wood Mackenzie, said: "Venezuela offers the scale major producers need. But the fundamentals work against rapid deployment. Heavy crude economics at current prices, unresolved legal claims, and political uncertainty create a risk profile that extends well beyond typical above-ground challenges. Companies will watch. But commitments require more than sanctions relief."

Immediate implications for the oil market:

• Production decline underway:Wood Mackenzie anticipated Venezuelan crude production could fall from 820,000 b/d in November by 200,000 to 300,000 b/d in early 2026 as market participants pull back and high inventories force production curtailment.
• Muted market reaction reflects oversupply:The oil market reaction to the December blockade was muted, due to significant oversupply anticipated for 2026, particularly in Q1.
• Sanctions relief could restore barrels quickly:The US could alter its sanctions policy to enable Venezuelan oil sales to US refiners. This would provide US dollars to support production restoration to over 800,000 b/d, with immediate exports lifted as onshore inventories are cleared.
• Price floor at risk:Incremental barrels would add to an already oversupplied market, driving Brent below the mid- to high-$50s per barrel levels Wood Mackenzie projects for Q1 2026.

Access the full insight report to find out more and make informed decisions in a rapidly shifting oil market: Venezuela regime change: what it means for oil production, crude and product markets | Wood Mackenz…