1. Venezuela regime change: what it means for oil production, crude and product markets
Opinion

Venezuela regime change: what it means for oil production, crude and product markets

What is the oil market risk and will Big Oil want to invest in Venezuelan upstream opportunities?

1 minute read

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Alan Gelder

SVP Refining, Chemicals & Oil Markets

Alan is responsible for formulating our research outlook and cross-sector perspectives on the global downstream sector.

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Fraser McKay

Head of Upstream Analysis

As head of upstream research, Fraser maximises the quality and impact of our analysis of key global upstream themes.

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Dylan White

Principal Analyst, North American Crude Markets

Dylan leverages cutting-edge data to offer real-time insight into the oil industry.

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Simon Flowers

Chairman, Chief Analyst and author of The Edge

Simon is our Chief Analyst; he provides thought leadership on the trends and innovations shaping the energy industry.

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Ed Crooks

Vice Chair Americas and host of Energy Gang podcast

Ed examines the forces shaping the energy industry globally.

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Tom Ellacott

Senior Vice President, Corporate Research

Tom leads our corporate thought leadership, drawing on more than 20 years' industry knowledge.

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Adrian Lara

Principal Analyst, Upstream Latin America

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Douglas Thyne

Research Director, Oil Supply

Douglas manages our global oil supply research and forecasts.

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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. But 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 has indicated that this refers to the US wielding economic leverage to influence regime change and policy, as opposed to imposing actual US governance in Venezuela. Still, it is unclear quite how the US will effectively exert influence over Venezuela without a physical presence. The naval blockade remains in place, as do the US sanctions on Venezuela, which target many individuals, limit Venezuela’s access to US financial and debt markets, and restrict the movement of oil. 

Fill in the form to read the full report, and read on for the immediate implications for the oil market.

What are the immediate implications for the oil market?

The US naval blockade of Venezuela of 17 December 2025 was starting to impact its oil exports, which were predominantly bought by China. Vessels sanctioned by the US were diverting away from Venezuela after the oil tanker “Skipper” was boarded by the US Navy and Coast Guard. In our recent report, we anticipated that 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.

The oil market reaction to the blockade was muted, due to the significant oversupply anticipated for 2026, particularly in Q1. With Maduro in custody, the US could alter its sanctions policy to reward Venezuelan compliance with the Trump administration by enabling the sale of its oil exports to US refiners. This would quickly provide a source of US dollars to support the country’s finances, enabling production to be readily restored to over 800,000 b/d, with immediate exports lifted as onshore inventories are cleared. Incremental barrels would only add to an already over-supplied market, however, driving Brent below the mid- to high-US$50/bbl levels we project for Q1 2026.

Get greater insight

Fill in the form above to download our full report and learn more about:

  • How quickly investment in upstream could return

  • The potential for Venezuelan refineries to ramp up and export products again

  • Whether Big Oil will be attracted to Venezuela

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