US raid on Venezuela rattles markets, economists warn

Economists are warning that the United States’ military action in Venezuela could add to volatility in global financial markets, even if the direct impact on oil prices is likely to be limited.

Dr Amonthep Chawla, executive vice president and head of research at CIMB Thai Bank, said that setting aside politics, security and geopolitics and looking only at the economic channel, the fallout can be broken down into several distinct effects—some immediate and others that require monitoring over time.

Oil: limited downside shock, possible supply upside later

Venezuela holds some of the world’s largest crude reserves, but its oil exports have been constrained for years by existing measures and restrictions. At the same time, the global oil market in recent periods has been characterised by relatively ample supply, he said.

“As an economic factor alone, this does not look like something that would materially move global crude prices,” Amonthep said, arguing that high supply levels in the broader market mean the operation does not create a meaningful negative supply shock.

Looking ahead, he added, Venezuelan exports could even become easier after the latest developments—provided there are no new bans or additional restrictions. If that happens, global supply could increase further, which could in turn put downward pressure on crude prices rather than push them higher.

Markets: higher risk premium, short-term dollar strength

The second issue is the global “risk premium”. Amonthep said the episode may raise perceived risk for investors who conclude that certain countries or regions face greater exposure to US pressure—whether through conflict, intervention or expanded sanctions.

That could translate into higher uncertainty for markets seen as hostile to the US, and a higher risk premium for emerging markets. Investors may reduce exposure to risk assets and shift towards perceived safe havens, he said.

Such a move could support the US dollar in the short term, as funds flow back into dollar assets. However, he stressed that any dollar strength driven by this type of shock is typically temporary. Beyond the immediate period, the dollar’s direction is likely to revert to fundamentals such as monetary policy, fiscal policy and other structural factors.

Trade war: watch for tougher curbs on “adversaries”

The third issue, he said, is the trajectory of US policy and the risk of a sharper trade war. Amonthep said investors should watch whether President Donald Trump’s approach extends beyond Venezuela into a broader effort to reshape the global order—potentially through tougher trade barriers against countries viewed as US adversaries.

China is one key focus, he said, warning that the US–China trade conflict may not be over and could intensify. That could include tighter restrictions on exports of advanced technology such as AI and semiconductors. He also flagged the possibility that China—after previously easing restrictions on rare-earth exports—could revisit that stance and use critical minerals as leverage in response.

If the trade war escalates, global trade could slow and Thailand’s exports to China could weaken as a knock-on effect, he said. But he added that the picture is not purely negative. One offsetting channel is “trade diversion”: if US goods become harder or more expensive to sell into China, other exporters—including Thailand—could potentially capture some market share.

Whether Thailand can seize that opportunity depends on how quickly it can advance trade negotiations with the US to close gaps and make the most of shifting trade patterns, he said.

Amonthep also pointed to “relocation”, or companies shifting production bases out of China into ASEAN to reduce exposure to trade-war risks. Thailand needs to build investor confidence and strengthen its competitiveness to attract such investment, he said, warning that if it fails to do so, other countries in the region—such as Vietnam, Malaysia or Indonesia—may benefit more.

Broker view: oil and equities hit likely contained, OPEC in focus

In a separate assessment, broker CGS International (Thailand), or CGSI, said the US–Venezuela tensions were likely to have only a limited impact on global equities and oil prices and were unlikely to drag on, because oil production sites had not been directly damaged and supply remained available.

Kasem Prunratanamala, chief executive of CGSI’s securities analysis division, told Krungthep Turakij that the effect on oil prices remains difficult to gauge, given that Venezuela has faced sanctions for a long time. Still, he said markets should watch the risk that China could face disruptions to Venezuelan oil purchases and be forced to buy more from the wider market, which would lift demand and could push prices higher.

He also said attention is turning to an OPEC meeting expected in the coming days. If OPEC holds production steady in the first quarter while Chinese demand rises, oil prices could climb. If OPEC increases output, that could help offset the impact. Overall, he said, markets were unlikely to panic.

Kasem added that the tone in global equity markets remained broadly positive, with momentum carrying over from last year. Thailand’s stock market, however, was expected to remain range-bound, he said, with domestic political factors the main drag on a recovery—particularly in the first quarter.

Both Amonthep and Kasem said Thailand should focus on strengthening investor confidence and moving quickly on investment promotion and trade engagement to position the country for shifting trade patterns and potential supply-chain relocation.