Oil – International Prices: The aftershocks of developments in Venezuela

The international oil market has been on a downward trajectory for some time, a trend that has been reinforced by developments following the U.S. intervention in Venezuela.

Specifically, U.S. crude is trading around $56 per barrel. At the opening of markets, losses stood at 0.70%, while on a monthly basis prices have already recorded declines of around 3.43%.

Brent crude is following a similar path, posting a daily drop of more than 0.63%, with prices approaching $60 per barrel ($60.33). Over the past month, Brent has fallen by approximately 3.51%.

The main driver behind this trend, according to analysts, is the assessment that U.S. intervention in Venezuela has created expectations of a relative increase in Venezuelan oil production and exports. It is noted that these remain highly limited due to the embargo, beyond what is reported through so-called “shadow” fleets. Nevertheless, it is estimated that production could rise from the current 900,000 barrels per day to 1.2–1.3 million barrels per day, even without the major investments typically required in the sector.

It is also noted that Venezuela currently produces less than 1% of global crude oil output, compared with 3%–4% in previous decades. However, the country holds around 300 billion barrels of proven reserves, representing nearly 20% of global reserves. These are mainly heavy and sour crude reserves, suitable for refining products such as diesel, asphalt, and heavy-use fuels.

Analysts point out that heavy crude increases refining costs, especially for products such as gasoline. However, due to measures imposed against Russia, there are supply shortages of heavy crude, which in turn affect prices of diesel and other by-products.

Downward Conditions

Overall, according to the latest weekly analysis by Alpha Bank’s Economic Research Division on the global economy, “from the beginning of 2025 to date, the price of crude oil (Brent) has followed a downward trend and has fallen by almost 20%. Only a few short-term increases were recorded, as reactions to geopolitical events, such as in mid-June due to the war between Israel and Iran, and in late October following the announcement of new U.S. sanctions on Russian oil companies. According to a recent World Bank report (Commodity Markets Outlook, October 2025), oil prices recorded their fourth consecutive year of decline, and it is estimated that in 2026 they will fall to their lowest level in recent years.”

According to Goldman Sachs, in a global market with abundant oil supply, any further disruption to Venezuelan exports would have little immediate effect on prices. “We see unclear but moderate short-term risks to oil prices from Venezuela, depending on the evolution of U.S. sanctions policy,” Goldman Sachs analysts stated.

At the same time, OPEC maintained its plans to pause production increases in the first quarter, during a meeting held yesterday, Sunday. As international media report, global markets are currently oversupplied. Meanwhile, key members led by Saudi Arabia and Russia will keep collective production levels unchanged until the end of March.

More specifically, according to the Alpha Bank study, “in 2025 and 2026, global oil supply is expected to increase, according to the International Energy Agency. In fact, surplus supply (total supply minus total demand) in 2026 is estimated to rise by around 65% above the historic peak level of 2020. Supply growth is expected to accelerate in the Middle East, North Africa, Afghanistan and Pakistan, Latin America, and the Caribbean, while it is expected to slow moderately in advanced economies. Nearly half of the increase in 2025 is estimated to come from OPEC, reflecting higher production targets.”

A Vulnerable Market

However, Alpha Bank’s analysis notes that “the oil market remains vulnerable in the event of a deterioration in geopolitical conditions. Attacks on energy infrastructure in Russia and Ukraine, combined with new Western sanctions against major Russian oil producers, have increased uncertainty regarding Russia’s oil supply, which accounts for approximately 9% of global supply. Specifically, attacks on Russian infrastructure have reduced the country’s oil refining capacity by around 500,000 barrels per day, causing domestic fuel shortages and a decline in oil exports (Energy Market Outlook 2026, ABN AMRO, November 2025).