Investors see a limited impact from the US capture of Venezuelan President Nicolás Maduro and any regime change that could follow.

Venezuela has the world’s largest proven oil reserves, estimated at 303 billion barrels as of 2023, above Saudi Arabia’s reserves and more than five times the size of the US’s reserves.

The nation was once one of the largest oil producers globally but has seen its output decline significantly over the past two decades.

Although US President Trump has stated publicly that the US will “run” Venezuela, market participants see a long path ahead to unlock its crude oil reserves.

Alone, the US “cannot unlock Venezuela’s massive crude oil reserves”, according to Stephen Dover and Larry Hatheway, strategists at the Franklin Templeton Institute. “For that, durable political stability is necessary,” they said.

“Given the uncertainties about how Venezuela will be governed and given the checkered US history of ‘regime change’ in petro-countries (e.g., Iraq or Libya), oil markets are unlikely to anticipate a rapid increase in crude oil supply from Venezuela,” they explained.

Venezuela’s oil production has also been long mired by ageing oil extraction and transportation infrastructure.

This, coupled with the low quality of its heavy crude, “suggest that even the arrival of political stability will not quickly increase its crude oil output or exports”, the strategists said.

Regime change is not regime change for oil

Upgrading the country’s outdated oil infrastructure would take years, according to Norbert Rücker, head of economics & next generation research at Julius Baer.

“Production is unlikely to climb beyond 2 million barrels per day by the end of the decade,” he said.

But longer-term stability in Venezuela combined with a peace deal in Ukraine could release over 5 million barrels per day into global crude markets by the end of the decade, according to Dover and Hatheway.

“If so, that would amount to about 5% or more of global crude output, enough to keep oil prices depressed for longer, which would be a clear positive for global growth and a restraint on inflation,” they explained.

According to Rücker, the overall outlook for oil prices remains the same. He maintains a neutral view on oil with prices trading in the high $50s for most of 2026.

“The oil market seems in a lasting surplus, largely due to structural factors, and able to weather geopolitics quite well,” he said.