Oil Prices Poised to Rise as Venezuela Exports Stall

Oil prices are expected to move up when benchmark futures resume trading due to new concerns that supply may be disrupted following the US’ arrest of Venezuelan President Nicolas Maduro, according to a recent Reuters report.

The report, published on Sunday, January 4, noted that the US snatched Maduro from Caracas over the weekend, while US President Donald Trump said Washington would take control of the oil-producing country.

Reuters went on to say that the global markets still have a plentiful supply of oil, so the disruption in Venezuela’s exports is unlikely to have an immediate impact on prices, according to analysts. 

Furthermore, the extraction of Venezuela’s president inflicted no direct damage to the country’s oil production and refining industry. Instead, exports have dropped after Trump imposed a blockade of sanctioned oil tankers entering and leaving Venezuelan waters, and seized two cargoes in December 2025. Following that, exports have been completely paralyzed since January 1, which has left millions of barrels stuck on loaded tankers, while millions more will have to be moved to oil storage facilities, since they cannot be exported at the moment.

Venezuelan Exports Brought Down To A Minimum While The Country Runs Out Of Storage

The OPEC member’s exports dropped to around 500,000 barrels per day last month, which is only around half of what they were a month earlier, in November. Most of the exports taking place in December happened before the embargo, and since then, only exports from Chevron have continued to leave the country, with around 100,000 barrels per day being exported, as the US granted authorization to produce and export from Venezuela despite the sanctions.

Meanwhile, the export freeze caused PDVSA to start cutting oil output, according to three sources familiar with the matter, as Venezuela is running out of storage capacity. PDVSA even reached out to multiple joint ventures operating in the area, asking them to cut back production, meaning that they would need ot shut down oil fields or well clusters.

For now, Trump has confirmed that the oil embargo will remain in full effect. However, some have noted that loosening the embargo and at least allowing crude exports to leave the country would allow for refiners in the U.S. Gulf to process the oil.

Capital Economics’ group chief economist, Neil Shearing, said that the events that unfolded over the weekend are unlikely to alter global oil markets or the global economy, since the US strikes did not damage Venezuelan infrastructure. Meanwhile, any short-term disruption to Venezuelan output can easily be offset through increased production elsewhere.