Oil Markets Not Worried About Venezuela, McNally Says

Summary

Bob McNally discusses the oil-market implications of US strikes in Venezuela and the capture of Nicolas Maduro. He says the loss of about 300,000 barrels per day from Venezuela is modest, and with oil markets desensitized to geopolitical disruptions since 2019, prices should remain soft absent broader unrest. However, he sees a potential upside risk if markets start taking President Trump's energy-related threats, especially toward Iran, more seriously. He also discusses China's limited exposure, OPEC+ long-term concerns, and the slow path to reviving Venezuelan oil output.

• US strikes and Maduro's capture raise questions about Venezuela's oil supply.
• McNally estimates around 300,000 barrels per day of lost production from the tanker blockade.
• Oil markets have been largely unresponsive to geopolitical supply risks since 2019.
• He expects oil to remain soft absent a broader disruption.
• Trump's threats involving Iran and energy could add geopolitical risk premium.
• China's crude imports are not materially threatened by losing Venezuelan barrels.
• A major revival of Venezuelan oil production is seen as many years away.
• OPEC+ is focused more on long-term price stability than near-term Venezuela losses.