Venezuela’s long-running crisis has intensified since Juan Guaido assumed the mantle of the opposition in January, drawing support from the United States and several other Western countries. What was once a slow-motion economic meltdown has now transformed into an existential fight, with both sides vying for loyalty from the military. Should the security forces split, civil war would become a very real possibility.
Home to the world’s largest proven oil reserves, Venezuela is an energy market mover and a crisis there can be expected to resonate in global oil prices. However, following years of production declines, the significance of Venezuelan exports in global supply isn’t what it used to be. And in declaring all-out war with sanctions on the state-owned PDVSA, the Trump administration is gambling that sidelining Venezuelan supply is a manageable risk.
Here’s the response we can expect from oil markets amid the Venezuela crisis: