The next steps the US will take in Venezuela are still uncertain. In this situation, the oil market could be affected. Usually, political unrest in a major oil-producing country causes prices to rise immediately or for a few days. However, Venezuela’s role in the global oil market is no longer what it used to be. Currently, its exports are only around 500,000 barrels per day.

Risk of worker discontent and sabotage::

The biggest risk for the country now is the possibility of a strike or sabotage by oil workers. In that case, the supply disruption could last for months instead of days. Although Maduro has tried to maintain the support of this sector, reports of extreme poverty among workers indicate that their reaction to Maduro’s fall will be indirect. Even if the core workers are loyal to the government, they are not unaware of the country’s current dire plight.

Challenges and prospects for the new government:

If Venezuelan opposition leader Maria Corina Machado takes power, her first priority will be to modernize the oil industry. If maintenance work begins at Venezuela’s oil fields, which are suffering from a lack of investment, it is possible to increase oil production by an additional 500,000 barrels per day by the end of this year.

Impact on the market:

The oil market is already under pressure due to oversupply. If Venezuela increases production in the meantime, it could be a ‘stab in the back’ for the market. If a new government comes to power, they will be desperate to increase production to rebuild their economy and may not heed OPEC+’s pleas to control oil prices.

Long-term impact:

Venezuela has one of the world’s largest oil reserves. The country has not been able to take advantage of this for a long time due to a lack of proper maintenance and investment. If a stable and foreign investment-friendly government is established after Maduro’s departure, Venezuela could once again become one of the world’s top oil suppliers, meaning that the likelihood of future oil prices rising is reduced.