Goldman Sachs comments on the situation in Venezuela: Short-term impact on oil prices is expected to be limited, and long-term production may rise

The Zhitong Finance App learned that Goldman Sachs said that after the US arrests the Venezuelan leader, the room for long-term growth in the country's oil production may eventually put pressure on global crude oil prices. Last weekend, the United States shocked the world by attacking the South American nation of Venezuela, arresting Venezuelan President Nicolas Maduro, and claiming to “take over” the country. Venezuela used to be a major oil producer, but production has declined sharply over the past 20 years. Goldman Sachs analyst Daan Struyven and others pointed out in a Sunday report that any recovery “is likely to be gradual and incomplete, as infrastructure is aging and strong incentives are needed to attract significant upstream investment.”

Goldman Sachs kept the average price expectations for Brent crude oil and WTI crude oil unchanged at 56 US dollars and 52 US dollars per barrel, respectively. Crude oil futures fell during the opening of trading on Monday, and the price of Brent crude oil fell slightly, close to $61 per barrel.

They said, “Given that recent Russian and US oil production has exceeded expectations, Venezuela's long-term production may increase further, which will exacerbate the downside risk of our oil price forecast for 2027 and beyond.”

After Maduro stepped down, US President Trump said that US companies would invest billions of dollars to rebuild Venezuela's shaky energy infrastructure and drew up an ambitious blueprint to restore the country's oil industry to its former glory using America's financial resources and industry technology.

According to Goldman Sachs, Venezuela has the world's largest proven oil reserves. When production peaked in the mid-2000s, production was around 3 million barrels per day. The bank said that in November of last year, Venezuela's daily production was 930,000 barrels. Since then, production may drop further after reports about the cessation of production appeared.

Prior to Maduro's arrest, the US imposed a partial blockade on oil tankers docked in Venezuela, causing local oil storage tanks to fill up.