Oil prices fell on Monday as adequate global supplies offset concerns about supply disruptions due to the U.S. capture of Venezuelan President Nicolas Maduro in an audacious raid over the weekend.
Brent crude futures were down 50 cents, or 0.8%, to $60.26 a barrel at 0752 GMT, while U.S. West Texas Intermediate crude was 53 cents, or 0.9%, lower at $56.79 a barrel.
The key benchmarks were volatile in early Asian trade as investors assessed the political upheaval in OPEC member Venezuela and the potential impact on oil supply.
President Donald Trump said Washington would take control of the country and that a U.S. embargo on Venezuelan oil remained in full effect, after detaining Maduro in New York on Sunday.
In a global market with plentiful oil supply, analysts said any further disruption to Venezuela’s exports would have little immediate impact on prices.
Kazuhiko Fuji, consulting fellow at Japan’s Research Institute of Economy, Trade and Industry, noted that U.S. strikes had not damaged the South American country’s oil industry.
“Even if Venezuelan exports are temporarily disrupted, over 80% are destined for China, which has built up ample reserves, and alternative sourcing is unlikely to strain the market,” Fuji said.
Top officials in Maduro’s government, who have called the detention of Maduro and his wife Cilia Flores a kidnapping, are still in charge and vowed to stay unified behind Maduro, but a change in government could suppress prices, analysts said.
Venezuelan production could rise by a few hundred thousand barrels per day by the end of 2026, but further gains would require significant investments, Raymond James analysts said in a note.
“Any meaningful recovery in Venezuelan output is likely to take considerable time,” UBS strategist Giovanni Staunovo said.
Trump said on Sunday that the U.S. might launch a second military strike on Venezuela if remaining members of the administration do not cooperate with his efforts to get the country “fixed”.
“All bets are off in a chaotic change of power scenario like what occurred in Libya or Iraq,” said Helima Croft, RBC Capital’s head of commodities research.
The Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, decided to maintain their output on Sunday.
Trump also raised the possibility of further U.S. military interventions in Latin America, and suggested Colombia and Mexico could face military action if they do not reduce the flow of illicit drugs to the United States.
Analysts are also watching Iran’s reaction after Trump threatened on Friday to intervene in a crackdown on protests in the OPEC producer, ratcheting up geopolitical tensions.
Source: Reuters
- Agencies
