MercoPress. South Atlantic News Agency

Oil prices surge amid US-Venezuela standoff

OPEC+ has more than enough spare capacity to cover a complete Venezuelan outage

International oil benchmarks posted modest gains on Tuesday as the market entered a holiday-shortened week. Investors remained focused on the escalating geopolitical friction between Washington and Caracas, which has introduced a risk premium into an otherwise oversupplied market.

Trading volumes were thin ahead of the Christmas holiday, but both major indices closed higher for February delivery. Brent crude rose 0.5% to settle at US$62.38 per barrel, while West Texas Intermediate (WTI) advanced 0.64% to close at US$58.38 per barrel under the so-called “Southern Spear” effect.

The primary driver for the day's upward nudge was the ongoing US naval blockade off the Venezuelan coast. Under “Operation Southern Spear,” the US has already seized two tankers suspected of carrying Venezuelan crude, with a third pursuit reported on Sunday.

Venezuela currently exports approximately 500,000 barrels per day (bpd) via “dark fleet” operations, primarily destined for Asian markets. Meanwhile, Chevron —the only US firm authorized to operate in the country— continues to export roughly 200,000 bpd to the United States.

Despite the current tensions and the protracted conflict in Ukraine, crude prices have struggled throughout 2025 due to persistent fears of a global glut, with WTI plummeting roughly 20% since January, while Brent has fallen more than 17%.

Prices have been pressured by OPEC+ production quota increases that began in April, alongside surging output from non-OPEC producers in North and South America.

“If we were to lose all Venezuelan exports, the price of oil would likely increase by $2 to $3 per barrel, which is not highly significant,” Andy Lipow, president of Lipow Oil Associates, told AFP. While he acknowledged the market's focus on the Caribbean crisis, he suggested the actual impact of a total Venezuelan shutdown would be contained. He pointed to the “readiness of other supply sources,” specifically citing production growth elsewhere.

Additionally, the 500,000–700,000 bpd at stake is considered “manageable” by OPEC+, which has more than enough spare capacity (roughly 5.5 million bpd total) to cover a complete Venezuelan outage.