SPAIN / VENEZUELA – In early January, US special forces abducted Venezuelan president Maduro and took him to the US to face charges. Vice president Delcy Rodriguez is now in charge of the Latin American country, with president Trump’s US aiming to dictate Venezuelan oil policy.
The impact on Venezuela’s economy
The initial impact on Venezuela has undoubtedly been negative. The US embargo on sanctioned oil exports has choked off vital revenue for the regime and led to accelerated exchange rate depreciation; the bolivar slipped from VES 300 per USD at the outset of 2026 to 330 in the aftermath of Maduro’s capture. Moreover, many businesses temporarily shut down in the wake of the U.S. strike due to security concerns.
The impact on oil markets
Brent crude prices are up over 5 percent since the US strike, rising from around USD 60 per barrel to close to USD 65. This is partly due to the US blockade on sanctioned Venezuelan oil, as well as social instability in Iran threatening oil production there.
JPMorgan’s Natasha Kaneva and Lyuba Savinova are optimistic about Venezuela’s future oil production:
“Venezuela could realistically achieve production levels of 1.3–1.4 mbd within two years of a political transition. With new investments and major institutional reforms, output could potentially expand to 2.5 mbd over the next decade. At present, the country’s oil production stands at around 750 kbd.”
Economists at Goldman Sachs think oil prices will only be significantly affected from 2027 onward:
“Potentially higher long-run Venezuela production further increases the downside risks to our oil price forecast for 2027 and beyond. Although Venezuela produced ~3mb/d at its peak in the mid-2000s and holds the world’s largest proven oil reserves (~1/5 of global reserves), we believe that any recovery in production would likely be gradual and partial as the infrastructure is degraded and would require strong incentives for substantial upstream investment […]. We estimate $4 of downside to our 2030 base case Brent oil price forecast of $80 in an upside scenario where Venezuela crude production rises to 2mb/d in 2030 (vs. our 0.9mb/d base case).”
ING’s Warren Patterson concurs:
“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.”
Geopolitics
The US capture of Maduro has—for the time being at least—smoothed relations between the Trump administration and Venezuela, with Delcy Rodriguez allowing the US to dictate Venezuelan oil policy. However, US relations with China, Russia and Latin America have worsened as a result.
Moreover, encouraged by success in Venezuela, Trump is now hankering after Greenland, threatening tariffs on European nations who block him. The EU is threatening retaliatory tariffs in return. An eventual US occupation of the Arctic island would destroy decades of trans-Atlantic cooperation and usher in a much more uncertain world. As such, the eventual geopolitical consequences of Maduro’s abduction may be less about Venezuela itself, and more about what an emboldened US president eventually went on to do.
On the regime’s survival prospects, EIU analysts said:
“The survival of the PSUV regime has for decades rested on the control of the military and security forces, who were tasked with repressing opponents. It is highly possible that Maduro’s capture was facilitated by insiders from these forces, and questions about their loyalty will grow as they re-evaluate their own survival given the threat of further US military action. As such it is unclear how much support Venezuela’s military and security forces will continue to give Rodríguez and for how long.”
Desjardins’ Marc-Antoine Dumont worries about a possible domino effect produced by the intervention:
“The United States may have opened the door to a new series of troubling military actions. The return of the Monroe Doctrine means increased US presence and more frequent interventions in the Western Hemisphere, particularly in Central America. This could prompt Russia and China to take similar actions. This risks increasing market uncertainty and volatility and heightening the risk of further segmentation of the global economy and supply chains.”
DBS Bank’s Taimur Baig suspects the world economy and politics will remain uncertain this year:
“The US asserting its hegemony repeatedly hurts the global rules-based order and compounds the already-heightened sense of geoeconomic uncertainty. From now till the November US mid-term elections, there won’t be any respite in this arena, we suspect.”
Nomura’s Naka Matsuzawa thinks the impact of the raid will be mostly geopolitical:
“Given that Venezuela accounts for a low share of crude oil production, this author thinks that in assessing the impact of the US military raid, the focus will be less on oil prices than on changes in the broader geopolitical balance, particularly China’s policies on Taiwan and Russia’s policies on Ukraine. At this point, China has criticised the US’s military attack, stating that it violates international law. If it looks like the US will become increasingly isolationist going forward, heightened global geopolitical risks could lead to a reversal of carry trades and curbs on foreign direct investment.”
Venezuela’s economy today
Reliable government data on the economy is non-existent. The Finance Observatory—a private think tank—estimated that GDP contracted 2.7 percent in Q1 2025, with Venezuelan inflation at 170 percent in April of the same year. These are the latest periods of available data, as the authorities subsequently cracked down on private economic forecasters. Our panelists expect the economy to have broadly flatlined in 2025 as a whole, with inflation averaging about 180 percent in the year. In short: the economy is a mess, with GDP per capita a small fraction of its pre-2014 level.
Our experts’ view on Venezuela’s economic outlook
Despite the near-term disruption caused by US military intervention and, our panelists have grown notably more upbeat on this year’s outlook in recent weeks. At the start of the year our Consensus was for GDP to broadly flatline this year; now it’s for a 2 percent economic expansion. GDP growth forecasts for 2027 have likewise seen a sizable upgrade.
These projections are likely prefaced on the US selling Venezuelan oil at market prices and giving the Latin American country a share of the proceeds, as well as possible investment in Venezuela oil infrastructure by American firms. On 20 January, Delcy Rodriguez said the country had recently received USD 300 million in oil proceeds from sales conducted by the US She also suggested a law change to boost foreign investment could be in the offing.
However, the economy will remain highly dysfunctional and far smaller than its pre-2014 size. Inflation is forecast to average in triple digits this year and next due to precipitous currency depreciation.
Moreover, Trump might wax lyrical about the prospects for American investment, but this is likely to be tentative without an improved legal framework and rule-of-law guarantees. Downside risks loom large, chiefly a breakdown of domestic political stability, which sees Rodriguez ousted or the armed forces split into different warring factions. In short: the outlook might have improved, but it’s still far from rosy.
