While the Trump administration has been taking a more hawkish stance against Venezuela in recent months, developments over the weekend have led to shockwaves around the globe, with the US arresting Venezuelan President Nicolas Maduro and flying him to the US to face criminal charges related to drug trafficking, ING's commodity expert Warren Patterson notes.

Short-term Oil risk limited despite 900k b/d supply at stake

"The short-term implication for the market really depends on what kind of transition in power we see in Venezuela. Clearly, a prolonged and messy transition increases the risk for supply disruptions in the short term. However, for now, Vice President Delcy Rodríguez has taken over. While her rhetoric was initially defiant, it appears to be shifting already, with statements that Venezuela and the US should work together. A smooth transition, with a government which is also more willing to cooperate with the US, likely leaves more downside for the market."

"A messier transition puts around 900k b/d of supply at risk; the bulk of this Oil goes to China, while US refiners import a little less than 150k b/d. While losing this supply would provide some upside to our current forecasts, a well-supplied market means the upside is likely limited. In addition, some supply losses would have already been priced in, given that we saw Venezuelan Oil exports coming under pressure in December with the US blockade of sanctioned Oil tankers in and out of Venezuela."

"For now, developments over the weekend have not led us to change our view on the Oil market for 2026. We still expect a well-supplied market to weigh on prices and continue to forecast Brent to average $57/bbl over 2026. Meanwhile, for 2027, there are downside risks to our $62/bbl forecast if we start to see meaningful supply increases from Venezuela, although much will also depend on how OPEC+ responds."