Oil holds steady as market shrugs off Venezuela upheaval

Oil held broadly steady on Monday as traders shrugged off any possible impact on oil flows from the U.S. capture of President Nicolas Maduro of Venezuela, home of the biggest global oil reserves.

Brent crude futures were up 37 cents, or 0.6%, to $61.12 a barrel at 1244 GMT, while U.S. West Texas Intermediate crude ticked up 41 cents, or 0.7%, to $57.73 a barrel.

The benchmarks have crept in and out of negative territory in European trading as markets digested news that the U.S. had captured Venezuela’s leader and that Washington would take control of the OPEC member, whose crude exports had been under a U.S. embargo which is staying in place.

In a global market with plentiful oil supply, analysts said any further disruption to Venezuela’s exports would have little immediate impact on prices.

Oil output in the country has plummeted in recent decades amid mismanagement and a lack of investment from foreign firms after Venezuela nationalised oil operations in the 2000s.

Read more: Oil prices drop after biggest annual loss since 2020

Output averaged around 1 million bpd last year, or just 1% of global production.

Venezuela’s acting president offered on Sunday to collaborate with the U.S.

“This reduces the risk for an extended embargo on Venezuelan oil exports, with oil potentially flowing freely out of Venezuela in not too long,” said SEB analysts. Shares of U.S. energy companies rallied.

Others were more hesitant. “The oil market is faced with a surplus unrelated to Venezuela. We can see why the market may focus on the bearish angle of more barrels out of Venezuela; we just do not see that happening quickly,” said Bernstein analysts.

Trump also raised the possibility of further U.S. interventions, suggesting Colombia and Mexico could face military action if they did not reduce the flow of illicit drugs.

Analysts are also watching Iran’s reaction after Trump threatened on Friday to intervene in a crackdown on protests in the OPEC producer.

Elsewhere, the Organization of the Petroleum Exporting Countries and its allies decided to maintain their output on Sunday.