"Venezuela Crisis Seen as Medium- to Long-Term Downward Factor for Oil Prices... Output Increase Expected from Central and South American Producers"

"Venezuela Expected to Boost Oil Production Under U.S. Influence"
Time Lag Until Actual Output Increase... Short-Term Impact Remains Limited

Securities analysts have projected that the recent U.S. airstrike on Venezuela will act as a medium- to long-term factor driving down international oil prices. They argue that Venezuelan crude oil production is likely to increase under U.S. influence, which could in turn lead to a rise in output among other oil-producing countries in Central and South America.

Oh Jaeyoung, a researcher at KB Securities, stated on January 5, "Although it will take more than two to three years for actual production to increase, the structural oversupply in the current oil market and the burden of global inventories are growing."

A mural near the Venezuelan state-owned oil company PDVSA depicts the working scenes of oil workers. Photo by Reuters Yonhap News

He assessed that the short-term impact on international oil prices would be limited. Currently, volatility in global crude oil prices remains minimal. Oh explained, "As the conflict between the United States and Venezuela ended quickly, concerns over supply disruptions that had risen in the short term appear to have eased. This also reflects the fact that Venezuela's production volume does not account for a significant share of the global market."

Venezuela's crude oil output falls short of 1 million barrels per day, accounting for less than 1% of global production despite its substantial reserves. The impact on the crude oil production plans of the Organization of the Petroleum Exporting Countries Plus (OPEC+) is also expected to be limited.

Oh noted, "Unless geopolitical risks escalate, the impact on international oil prices will remain limited," adding, "Venezuela's crude oil output is already excluded from the OPEC Plus production quota, so there is little likelihood that the planned production increase announced in this situation will be revised."

In the medium to long term, development plans led by major U.S. oil companies are expected to act as a downward factor for oil prices. Oh said, "Expectations for increased Venezuelan oil supply are likely to lead to a decline in international oil prices," and also highlighted the possibility that this could be accompanied by increased production from other oil-producing countries in Central and South America, such as Brazil and Mexico.

Meanwhile, in the commodities market last week, precious metals experienced a significant decline of 5.3%. The Chicago Mercantile Exchange (CME) raised margin requirements for gold, silver, copper, platinum, and other metals twice on December 29 and 31, 2025, which increased price volatility. Oh added, "Although volatility is expected to remain elevated for some time due to the CME's futures margin hikes and recent rapid increases in precious metal prices, the outlook for further gold price increases within the year remains unchanged."