Kuwaiti experts downplay oil market impact of Venezuelan political developments

By: Khaled Al-Mutairi KUWAIT, Jan 6 (KUNA) -- The recent global geopolitical developments, particularly the arrest of Venezuelan President Nicolas Maduro by the United States, have once again highlighted the sensitivity of international oil markets to political events in producing countries, especially those with significant oil weight such as Venezuela.
Despite the long-standing challenges facing its oil sector, Venezuela remains a strategically important player in the global energy equation due to possessing one of the world's largest proven oil reserves, making any political developments related to its leadership closely monitored by oil markets.
While energy experts have played down the impact of the developments in Venezuela on oil markets, Minister of Oil Tariq Al-Roumi reaffirmed on Sunday Kuwait's commitment to supporting joint efforts aimed at enhancing global economic recovery and achieving balance in the oil market.
In this context, Kuwaiti oil and energy experts told KUNA on Tuesday that the impact of the US arrest of the Venezuelan president on global oil markets is limited in the short and medium terms, stressing that the effect is primarily psychological and not directly linked to actual oil supply levels.
They noted that although Venezuela holds the world's largest oil reserves, exceeding 300 billion barrels, its current oil production does not exceed one million barrels per day, representing less than one percent of total global oil output.
Oil prices saw a limited increase during Monday's trading session, the first following the arrest, with Brent crude closing at USD 61.76 per barrel, while US West Texas Intermediate (WTI) closed at USD 58.32 per barrel, up by around one dollar.
US President Donald Trump announced last Saturday that the US had carried out a "successful" military operation in Venezuelan territory that resulted in the arrest of President Nicolas Maduro and his wife, stating that Washington would administer Venezuela until a "smooth and fair transition of power" takes place.
Energy consultant Jamal Al-Gharballi said Venezuela is suffering from a sharp decline in production due to sanctions, aging infrastructure, and a lack of investment in oil field development and production.
He noted that Venezuela's current production does not carry significant weight in global supplies, adding that the cohesion of the OPEC+ alliance strengthens market stability in the face of sudden geopolitical changes.
He added that the US ban on Venezuelan oil remains in place, meaning Venezuelan crude does not significantly contribute to immediate global supply, stressing that raising production to high levels would require time and massive investments.
Meanwhile, energy expert and faculty member at the College of Technological Studies Dr. Mubarak Al-Hajri said Venezuelan oil will have no tangible impact on global markets due to production complexities and its high density.
He pointed out that Venezuelan crude is among the heaviest oils, with a density ranging between 14 and 18 API, making its production, processing, and transportation more complex. He added that heavy oil pricing is linked to logistical and market factors tied to supply chains, noting that comparisons with Canadian heavy crude overlook key technical differences, as Canadian crude is relatively lighter.
For his part, Chairman of the Kuwaiti Business Council in Dubai Dr. Firas Al-Salem said the arrest of the Venezuelan president and potential regime change could stimulate US investment in Venezuela, which holds oil reserves exceeding 300 billion barrels, qualifying it to become one of the world's largest oil producers.
Al-Salem added that expected foreign investment in Venezuela's oil sector could raise production beyond three million barrels per day in the long term from current levels of around one million barrels per day.
He added that such an investment would help reduce the heavy debts of Venezuela's national oil company, which holds exclusive production rights and is subject to US sanctions.
He noted that any future investment in Venezuela's oil sector would not have a direct impact on global oil prices and would take several years to materialize, given the need for massive investment to modernize the aging infrastructure.
Al-Salem warned that, in the long term, the return of a major producer to the global oil market without strong demand could exert downward pressure on prices if Venezuelan production exceeds three million barrels per day, with most of the output likely directed to US refineries, particularly in southern states.
Meanwhile, Minister of Oil Tariq Al-Roumi reiterated Kuwait's commitment to supporting joint efforts to enhance global economic recovery and maintain balance in the oil market, stressing that cooperation within the OPEC+ alliance remains a cornerstone for stabilizing energy markets.
Al-Roumi said that his participation in the meeting of the eight countries involved in the voluntary production cut exit agreement within OPEC+ came as part of monthly coordination to monitor oil market developments, enhance stability, and ensure supply security.
He praised the decision by the eight countries to continue maintaining production levels in February and March 2026, noting that Kuwait's oil production has stood at 2.580 million barrels per day since December. (end) km.aa