Venezuela crisis unlikely to disrupt oil supply, Brent forecast remains at $57/bbl, ING Group says

Oil prices reacted to the recent US arrest of Venezuelan President Nicolas Maduro by focusing on the long-term potential for increased supply, suggesting the market is anticipating a smooth power transition rather than immediate disruptions, according to an ING Group report.

Developments over the weekend have sent shockwaves globally, as the US arrested Venezuelan President Nicolas Maduro and flew him to the US to face criminal charges related to drug trafficking. 

This comes amid a recent period where the Trump administration has adopted an increasingly hawkish position toward Venezuela.

“We won’t speculate on the exact reasons behind the decision by the US administration to remove Maduro, but clearly, it has potentially significant implications for the oil market,” Warren Patterson, head of commodities strategy at ING Group, said in the report. 

It leaves only further supply uncertainty for the oil market, something the market has faced plenty of over the last year.

2026 oil market outlook remains intact

“The short-term implication for the market really depends on what kind of transition in power we see in Venezuela,” Patterson said. 

A messy, prolonged transition clearly raises the short-term risk of supply disruptions, according to Patterson. 

However, Vice President Delcy Rodríguez has currently assumed control.

Although her initial rhetoric was defiant, it seems to be changing, with statements now suggesting cooperation between Venezuela and the US. 

Conversely, a smooth transition, particularly with a government more open to working with the US, would likely create more market downside.

This development heightens the prospect of the US ending its blockade on Venezuelan-sanctioned oil tankers, according to the ING report.

This move could potentially lead to lower oil prices in the short term and might also set the stage for further sanctions relief in the future.

A disorderly transition could jeopardise approximately 900,000 barrels per day of oil supply.

The majority of this volume is destined for China, with US refiners importing a smaller portion, specifically just under 150,000 barrels a day.

“While losing this supply would provide some upside to our current forecasts, a well-supplied market means the upside is likely limited,” Patterson said. 

For now, developments over the weekend have not led ING Group to change its view on the oil market for 2026.

We still expect a well-supplied market to weigh on prices and continue to forecast Brent to average $57/bbl over 2026.

Potential supply increases

Despite possessing substantial oil reserves, Venezuela’s oil production remains relatively low, averaging slightly over 900,000 barrels per day in 2025, which accounts for less than 1% of global consumption. 

This significant drop in domestic oil supply over the past two decades is attributed to several factors: the expropriation of domestic assets from foreign oil companies, pervasive resource mismanagement, and economic sanctions. 

For context, Venezuela’s oil production was nearly 3 million barrels per day in the early 2000s, but it had fallen below 2.4 million barrels per day by 2015, and the rate of decline has accelerated since then, according to the ING report.

While Venezuelan oil production has the potential for a large recovery, any significant increase will likely require several years, as the process will not be a quick one, according to the report.

“We will need to see significant investment in Venezuela’s oil infrastructure, following years of neglect,” Patterson said. 

For this investment to succeed, foreign oil companies must agree to invest in the domestic industry.

However, this will be challenging, as both ExxonMobil and ConocoPhillips had their assets in Venezuela expropriated in 2007.

Despite US sanctions, Chevron is the sole American oil company permitted by a special US government licence to continue operations in Venezuela.

Heavy crude availability is likely to increase

The US historically relied on Venezuela’s heavy crude oil as a significant feedstock for US Gulf Coast refineries.

In the early 2000s, US imports of crude oil from Venezuela were nearly 1.3 million barrels per day.

Imports declined to just over 500,000 barrels per day by 2018, and the average for the first ten months of 2025 was under 150,000 barrels a day.

Refiners are seeking heavier grades of crude oil, so any increase in supply from Venezuela would be a welcome development, according to Patterson.

This poses risks for other major suppliers that provide US refiners with heavier grades of crude oil, Patterson added

The US heavily relies on Canada as a major source for its heavy crude oil supply.

Clearly, we could see West Canada Select differentials coming under pressure in the longer term if we see meaningful supply increases from Venezuela in the years ahead.

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