Oil prices edged lower on Monday as plentiful global supply helped markets look past political upheaval in Venezuela, despite the U.S. capture of President Nicolas Maduro in the world’s largest oil-reserve holder.
Brent crude futures fell 23 cents, or 0.4%, to $60.52 a barrel by 09:40 GMT, while U.S. West Texas Intermediate crude slipped 21 cents, or 0.4%, to $57.11 a barrel.
Price action was choppy during early Asian trading as investors weighed developments in Venezuela—an OPEC member whose crude exports have been subject to a U.S. embargo—and assessed whether the situation could materially disrupt oil flows.
U.S. President Donald Trump said Washington would take control of the country and confirmed that the embargo remained in force after Nicolas Maduro was detained and transferred to a New York jail on Sunday.
Analysts said that, in a market already flush with supply, any additional disruption to Venezuelan exports would likely have only a limited near-term effect on prices. Venezuela’s oil output has collapsed over recent decades amid poor management and reduced foreign investment following the nationalisation of the sector in the 2000s. Production averaged around 1.1 million barrels per day last year, accounting for roughly 1% of global output.
Kazuhiko Fuji, consulting fellow at Japan’s Research Institute of Economy, Trade and Industry, also noted that U.S. strikes had not damaged Venezuela’s oil infrastructure. “Even if Venezuelan exports are temporarily disrupted, over 80% are destined for China, which has built up ample reserves,” Fuji said.
Venezuela’s acting president said on Sunday that the country was open to cooperating with the United States. “This reduces the risk for an extended embargo on Venezuelan oil exports with oil potentially flowing freely out of Venezuela in not too long,” SEB analysts said.
Trump also raised the prospect of further U.S. interventions, warning that Colombia and Mexico could face military action if they fail to curb the flow of illicit drugs. Separately, analysts are monitoring Iran’s response 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 agreed on Sunday to keep production levels unchanged, reinforcing expectations of a well-supplied oil market.