Crude prices edge lower as Maduro overthrow casts uncertainty over oil-rich Venezuela

Core Viewpoint - The overthrow of President Nicolas Maduro has created uncertainty in Venezuela's oil sector, impacting crude oil prices and U.S. investment strategies in the region [1][2]. Oil Prices - U.S. crude oil prices decreased by 31 cents (0.54%) to $57.01 per barrel, while global benchmark Brent fell by 22 cents (0.36%) to $60.53 per barrel [1]. U.S. Investment Objectives - The Trump administration aims to facilitate U.S. investment in Venezuela's oil sector, with plans for major U.S. oil companies to invest billions to repair the country's oil infrastructure [2]. Venezuela's Oil Reserves - Venezuela holds the largest proven crude oil reserves globally, totaling 303 billion barrels, which accounts for approximately 17% of the world's total [3]. Production Trends - Venezuela's oil production has significantly declined from a peak of 3.5 million barrels per day in the late 1990s to about 800,000 barrels per day currently [4]. Current U.S. Operations - Chevron is the only major U.S. oil company currently operating in Venezuela, exporting around 140,000 barrels per day as of the end of Q4 2025 [4]. Short-term Price Impact - The short-term impact of Maduro's removal on oil prices is uncertain; production may increase if a U.S.-backed government is established and sanctions are lifted [5]. Long-term Production Outlook - Long-term U.S. investment could lead to increased production, potentially exerting downward pressure on oil prices, although recovery is expected to be gradual and partial [6]. Investment Requirements - It is estimated that $10 billion annually is needed to restore Venezuela's oil production to historic levels, with a stable security environment being crucial for growth [7]. Potential Production Recovery - Full sanctions relief could result in several hundred thousand barrels of production returning within a year, provided there is an orderly transition of power [7]. Risks of Chaotic Transition - A chaotic change of power could lead to significant disruptions, similar to past scenarios in Libya or Iraq, complicating recovery efforts [8].