Goldman Sachs assesses the situation in Venezuela: Short-term impact on oil prices expected to be limited, long-term production may rise.

Goldman Sachs has said that the long-term growth potential of Venezuela's oil production could eventually put pressure on global crude oil prices. Last weekend, the United States attacked the South American country of Venezuela, arresting Venezuelan President Nicolas Maduro, and claiming to "take over" the country, shocking the world. Venezuela used to be a major oil-producing country, but its production has sharply declined over the past twenty years. Goldman Sachs analysts Daan Struyven and others pointed out in a report on Sunday that any recovery "could be gradual and incomplete, as infrastructure is aging and strong incentives are needed to attract significant upstream investment." Goldman Sachs has maintained its average price expectations for Brent crude and WTI crude this year at $56 and $52 per barrel, respectively. At the opening on Monday, crude oil futures prices fell, with Brent crude prices edging down slightly to close to $61 per barrel. They said, "Given the recent oil production exceeding expectations in Russia and the United States, Venezuela's long-term production could further increase, exacerbating downside risks to our oil price forecast for 2027 and beyond." After Maduro's ousting, U.S. President Trump said that U.S. companies would invest billions of dollars to rebuild Venezuela's crumbling energy infrastructure and outlined an ambitious plan to utilize U.S. financial resources and industry technology to restore the country's oil industry to its former glory. According to Goldman Sachs, Venezuela has the world's largest proven oil reserves, with daily production reaching around 3 million barrels in the mid-2000s when it peaked. The bank stated that in November of last year, Venezuela's daily production was 930,000 barrels, and production may further decline after reports of shutdowns emerged. Before Maduro's arrest, the United States implemented partial blockades on oil tankers docking in Venezuela, leading to local oil tanks being filled up.