Goldman Sachs(US:GS) Hua Er Jie Jian Wen·2026-01-05 00:18Core Viewpoint - The short-term oil supply outlook in Venezuela is uncertain due to recent political changes, but Goldman Sachs believes that a potential long-term recovery in the country's oil production could exert significant downward pressure on global oil prices [1]. Short-term Supply Risks - Goldman Sachs indicates that the impact of Venezuela on oil prices in the short term is ambiguous, depending on the evolution of U.S. sanctions policy [4]. - If the new government receives full sanction waivers with U.S. support, production could increase by 400,000 barrels per day by the end of 2026, potentially lowering the average Brent crude price to $54 per barrel [4]. - Conversely, if the Maduro administration attempts to maintain control leading to increased chaos, or if production interruptions continue due to storage limitations, production could decrease by 400,000 barrels per day, raising the Brent crude price to $58 per barrel [4]. - Current production is estimated to be around 900,000 barrels per day, down from approximately 930,000 barrels per day last November, with recent disruptions possibly reducing it to about 800,000 barrels per day [4]. Long-term Recovery Pressure on Oil Prices - Goldman Sachs notes that Venezuela holds about one-fifth of the world's proven oil reserves and previously peaked at around 3 million barrels per day in the mid-2000s [5]. - If Venezuela's oil production can rebound to 2 million barrels per day by 2030, it could create a downward pressure of $4 per barrel on oil prices, which are projected to be $80 per barrel [5]. - The potential increase in production, combined with unexpected output from Russia and the U.S., heightens the long-term downside risk for oil price forecasts [5]. - The gradual recovery of Venezuela's heavy crude oil production, rich in diesel components, may offset some structural benefits facing diesel margins [5]. - Despite ambitious rebuilding plans proposed by the Trump administration, Goldman Sachs remains cautious about the speed of recovery due to severely degraded infrastructure and the need for significant investment and time to improve heavy oil recovery rates [5][6].