Trump move to cap oil, Venezuela output in focus

Venezuela’s reserves and refining

“Venezuela” is a producing country with the largest volume of oil reserves in the world. The Department of Energy Business at Thailand’s Energy Ministry reports that the world currently has reserves of 1,732 billion barrels.

Venezuela has the largest reserves at 304 billion barrels, followed by Saudi Arabia with 298 billion barrels, Canada with 168 billion barrels, Iran with 158 billion barrels, Iraq with 145 billion barrels, Russia with 108 billion barrels and the US with 69 billion barrels.

Venezuela is also considered to have one of the world’s largest oil refineries. PDVSA’s PARAGUANA REFINERY COMPLEX is the world’s second-largest with capacity of 940,000 barrels per day, but Venezuelan refineries are producing far below capacity.

In terms of capacity, it ranks behind RELIANCE INDUSTRIES LTD.’s JAMNAGER REFINERY (India), which is the world’s largest.

Arne Lohmann Rasmussen, chief analyst and head of research at A/S Global Risk Management, told CNBC that although the US attack was unexpectedly large, the market had already recognised that this conflict would affect oil exports.

Venezuela, a founding OPEC member, has the world’s largest proven oil reserves, but currently produces under 1 million barrels per day—less than 1% of global output—and exports only half of its production, or 500,000 barrels.

The analyst estimated that Brent crude would rise by only US$1–2, or possibly less, when futures markets open late Sunday, January 4, 2026. He said Brent would edge down slightly next week compared with the closing price on Friday, January 2, 2026, of US$60.75.

“Even though it is a major geopolitical event that would normally be expected to push oil prices up, there is still too much oil in the market, and that keeps oil prices from surging quickly,” Rasmussen concluded.

Bob McNally, an analyst at Rapidan Energy, said he advised clients before the weekend that one-third of Venezuela’s output was at risk, although he did not expect all Venezuelan production to disappear. He said there was not much risk to the oil market in the short term.

The oil market in 2025 suffered its biggest year-on-year fall in five years. Brent crude, the global benchmark, fell 19% last year, while US crude fell nearly 20%. The market was pressured by OPEC+ increasing output after cutting production for years, while the US produced oil at a record high of more than 13.8 million barrels per day.

Analysts said oil prices could fall further if Venezuela’s government is overthrown, increasing the likelihood that production will gradually rise.

Saul Kavonic, head of energy research at MST Financial, estimated exports could reach 3 million barrels in the medium term if a new Venezuelan government leads to sanctions being lifted and foreign investors returning.

“Even though the situation in Venezuela may affect the market at first, the situation is already very bad, so from here it can only get better,” said David Goldwyn, an energy industry adviser and former Energy Ministry official under President Barack Obama.

US to step up oil investment in Venezuela

Trump’s press conference on January 3, 2026, said the ban on trading Venezuelan oil remained in force, while US oil companies would invest several billion dollars to restore Venezuela’s energy sector.

Goldwyn said it was difficult to predict whether US oil companies would invest, because of uncertainty over a transitional government and Venezuela’s future government. What has been learned about political transitions from Iraq and Afghanistan, he said, is that transitions are difficult. No company invests billions of dollars for the long term until it knows the conditions—and it will not know the conditions until there is a new government.

Meanwhile, several companies, such as ExxonMobil, are still waiting to recover debts from Petróleos de Venezuela S.A. (PDVSA), Venezuela’s national oil company.

US oil companies do not forget bad experiences

McNally of Rapidan Energy said US oil companies have not forgotten being forced out of Venezuela in the early 2000s, when the government seized foreign oil assets. But access to the world’s largest oil reserves is “tempting” for US oil companies if sanctions are lifted.

However, investment takes decades and billions of dollars. Whether it is worth it depends on whether the world will need that much oil.

“Late last year, the market agreed that oil demand would stop growing within four years due to electric vehicles, fuel-efficiency policies and climate change policies,” McNally said.

But when the US and other countries, such as China and Canada, relaxed climate policies and EV sales fell, investment opportunities in Venezuela became more interesting.

FTI says Trump wants to press oil prices down

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), told Krungthep Turakij that Venezuela has the world’s No.1 volume of oil reserves, most of which is exported to allied countries that are on the opposite pole to the US, such as China and India.

For the US to go in to control, manage, restructure investment and increase output that has in truth been far too low, he said, is aimed at “pressing global oil prices down so they do not rise”, as Trump has previously declared.

“Trump wants to rein in inflation because since President Trump took office, he has had a clear policy to keep average oil prices at US$58–60 per barrel, to prevent impacts on inflation and on goods prices in the US that could affect popularity,” Kriengkrai said.

He said Trump also wants to cut the strength of political rivals. This operation is seen as a way to cut ammunition—or cut the economic strength—of Russia, which has been in a state of war for four years. If the US controls Venezuelan oil and can release massive reserves into the global market, it would press global oil prices lower, weakening countries that rely on oil trade, such as Russia.

Kriengkrai said it is important to watch developments closely. In the short term, the oil market may experience a “shock” and prices may move up out of surprise. But in the long term, it depends on what measures the US takes to control Venezuela’s oil volumes to achieve the goal of price stability and pressure on global political rivals.

Fears conflict could widen

This could also create cracks and divisions internationally, because the incident has caused major dissatisfaction among key allies such as China, Russia, Iran, or even Brazil, which has protested.

Meanwhile, countries in the Americas such as Argentina have expressed admiration. This situation therefore reflects deepening cracks and sharper division, and a clearer split in global politics, while there is still no clear proof under the process of international justice.

However, the impact will affect the global economy in 2026 for sure. Previously, many institutions forecast that global growth in 2026 would be lower than in 2025. In 2025 it was 3.2% and it had once been forecast that 2026 would be 3.7%, but recently all institutions have revised estimates down to only 3.1%. With this incident occurring at the start of the year, it will further worsen global economic conditions.

Watch how the US manages Venezuela’s reserves

Tension from the Venezuela incident is being watched for its potential impact on oil prices, inflation and the investment atmosphere in global stock markets. While the overall global and Asian markets are not seen as being severely damaged, Thailand’s stock market still faces pressure from specific domestic factors.

Sorrabhol Virameteekul, assistant managing director and head of the investment strategy team at Kasikorn Securities Plc, said it is necessary to monitor how the US will manage Venezuela’s oil reserves—the highest in the world at 300 billion barrels. Based on past cases such as Iraq and Afghanistan, it is not easy because it requires billions of dollars, but the value of this move cannot yet be calculated.

For investment strategy, his model found that every 1% increase in global oil production affects crude oil prices by 2.5% (so if production increases by 1.5%, it is expected to affect medium-term crude prices by 4%). Venezuela currently produces 800,000 barrels per day (less than 1% of global oil production, and exports are less than half).

Therefore, he said crude prices in the short term may “rise only slightly” from war sentiment, but he has a mildly negative view of the energy sector because crude supply is expected to increase in the medium to long term.

Kasikorn Securities currently uses an assumption for Dubai crude in 2026 of US$65.0, in an oversupply position of about 1.2 million barrels per day. If the surplus rises to 2.6–3.0 million barrels per day, crude has a chance to fall to US$58–60. Every US$5 in crude affects downside to SET_EPS by about 1 point, plus or minus (from the current estimate of 90.5).

Watch OPEC review production levels

Kasem Prunratanamala, chief executive of the securities analysis division at CGS International (Thailand), or CGSI, said the impact on global stock markets and oil prices will be limited and not prolonged because production sites are not damaged and oil supply remains.

He said the impact on oil prices is hard to assess because Venezuela has been under sanctions for a long time. Meanwhile, the point to watch is if China cannot buy oil from Venezuela as normal and must buy from the global market, which may support higher oil prices.

Markets are also watching an OPEC meeting in the next few days on whether it will keep first-quarter production unchanged. If it keeps production steady while China’s demand increases, oil prices may rise, but if OPEC increases production, it could offset that impact.