Global oil prices dropped on Friday before the weekend close, recording a second consecutive week of losses. As of 18:00 GMT, WTI crude stood at $59.75 and Brent at $63.63 per barrel.
This decline occurred despite analyst predictions that the lingering threat of U.S. action against Venezuela would cause a supply disruption and push prices higher—a fear that did not materialize this week.
Venezuela holds a uniquely significant position in global oil: it has the world’s largest proven oil reserves; despite heavy sanctions, the country still contributes 1.0–1.1 million barrels a day to the global supply.
Venezuelan oil is primarily heavy and sour (dense and rich in sulphur), which contrasts sharply with the lighter qualities of WTI and Brent.
The market concern is fuelled by the continuing political tension. Although President Trump has reportedly ruled out military action to oust President Nicolas Maduro, the recent U.S. Senate vote that removed a previous obstacle for such a move suggests that military options remain on the table. Media reports indicate President Trump is gauging the effectiveness of an intervention while evaluating its potential impact on oil prices.
Venezuela exports a specific type of heavy and sour crude that requires specialized refineries for purification before export. These complex facilities are mainly located on the U.S. Gulf Coast and in parts of Asia.
The supply of this particular crude is already tight due to sanctions. This situation has forced specialized refineries to find costly alternatives, which in turn has contributed to higher prices for that specific product type.
Analysts remain hopeful that an amicable settlement with President Maduro could see Venezuela dramatically boost its output to 3–5 million barrels a day—nearly three times its current production. While this would take time to implement, requiring investment to repair aging infrastructure battered by decades of sanctions, a political resolution could allow Venezuela to significantly boost global oil supply in a relatively short time. This potential influx could drive oil prices down further, aligning with a key goal of President Trump.
Paradoxically, falling oil prices could force U.S. shale producers to exercise caution. With prices hovering between $50 and $60, producers are reportedly only breaking even. This narrow margin may push them to prioritize making existing wells more efficient rather than drilling new ones. This trend - evidenced by the static nature of the U.S. rig count in 2025 according to Baker Hughes data - runs counter to President Trump's "drill, baby, drill" strategy.
Even under current sanctions, Venezuela continues to sell oil but must offer significant discounts to buyers—estimated to be around $5–8 per barrel, similar to Russia's practice—to earn revenue.
In the short term, a major U.S. military action within Venezuela is highly unlikely. Beyond the legal complexities, President Trump must weigh the unpredictable impact on global oil prices before making a decision. Furthermore, promoting the doctrine of ending "endless wars" has been a consistent message to his MAGA base, making a sudden "U-turn" a politically difficult step.
Even under current sanctions, Venezuela continues to sell oil but must offer significant discounts to buyers—estimated to be around $5–8 per barrel, similar to Russia's practice—to earn revenue.
In the short term, a major U.S. military action within Venezuela is highly unlikely. Beyond the legal complexities, President Trump must weigh the unpredictable impact on global oil prices before making a decision. Furthermore, promoting the doctrine of ending "endless wars" has been a consistent message to his MAGA base, making a sudden "U-turn" a politically difficult step.
