What's happened
Since early January 2026, US forces captured Venezuelan President Nicolás Maduro and assumed control over parts of Venezuela's oil production. President Trump announced plans for US oil companies to invest billions to restore Venezuela's oil infrastructure and exploit its vast reserves. This has triggered a drop in global oil prices below $60 a barrel, easing fuel costs in import-dependent countries like Kenya amid ongoing geopolitical tensions and sanctions.
What's behind the headline?
Geopolitical and Economic Implications
-
The US military intervention and seizure of Venezuelan oil assets represent an unprecedented move, potentially constituting a hostile occupation under international law, as experts note. This raises legal and diplomatic challenges, especially given Venezuela's sovereignty and the involvement of other global powers like China.
-
Venezuela's oil reserves, mostly heavy crude, require significant investment and infrastructure upgrades to increase production. US plans to deploy major oil companies to revitalize the sector will take years to materialize, limiting immediate supply impacts.
-
The capture of Maduro and US control over oil assets have caused Brent crude prices to fall below $60 a barrel, reflecting market expectations of increased supply but also oversupply concerns globally. This price drop benefits oil-importing countries like Kenya by lowering fuel import costs and easing inflationary pressures.
-
However, the oil market remains volatile due to ongoing sanctions, potential supply disruptions, and geopolitical tensions. Analysts warn that any escalation or supply chain interruptions could reverse the current price decline.
-
The US faces a paradox: increasing Venezuelan oil production will add to the global surplus, pushing prices down and squeezing profits for oil companies, which may dampen investment incentives.
-
The situation underscores the complex interplay between geopolitics, energy security, and economic stability. The US aims to leverage Venezuela's resources to its advantage, but the long-term outcomes depend on political stability, international legal frameworks, and global market dynamics.
-
For consumers, especially in countries reliant on imported fuel, the current developments offer cautious optimism for lower prices and economic relief, but the path remains uncertain and contingent on sustained market conditions.
What the papers say
The New York Times' Stanley Reed highlights Venezuela's vast untapped reserves but notes that political turmoil and sanctions have limited its oil market influence, with production at just 820,000 barrels per day in November 2025. Reed quotes Debnil Chowdhury of S&P Global Energy: "It could make a difference," but the market currently expects oversupply and prices around $61 a barrel.
All Africa reports that the US takeover of Venezuelan oil assets has rattled global markets, pushing Brent crude below $60 a barrel. It explains how this price drop could ease fuel costs in Kenya, which imports all petroleum products refined, but notes that local price adjustments will lag due to regulatory pricing cycles.
SBS raises legal questions about the US intervention, with experts like Shannon Brincat stating that without Venezuela's consent, US control over oil reserves could be considered a hostile occupation under international law. The US claims extracted wealth will benefit Venezuelans, but the legality remains contested.
Business Insider UK and Goldman Sachs analysts emphasize the challenges of reviving Venezuela's oil production, citing the need for billions in investment and infrastructure upgrades. They warn that increased output could further depress already low global oil prices, squeezing industry profits.
France 24 provides historical context on Venezuela's oil sector, noting its nationalization and partnerships with foreign firms, including Chevron and Chinese companies. It also details the shift of Venezuela's oil exports from the US to China due to sanctions and blockades.
The Guardian outlines the broader market context, with oil prices falling nearly 20% in 2025 amid oversupply and slowing demand, despite geopolitical tensions. Analysts predict prices could fall further, benefiting consumers but challenging producers.
Together, these sources paint a complex picture of geopolitical maneuvering, market dynamics, and legal controversies surrounding Venezuela's oil amid US intervention.
How we got here
Venezuela holds the world's largest proven oil reserves but has suffered from political turmoil, economic mismanagement, and US sanctions that have crippled its oil production. In early January 2026, the US military captured President Maduro, intensifying efforts to control Venezuelan oil assets. The US embargo and naval blockade have further restricted Venezuela's oil exports, contributing to global market volatility.
Go deeper
- How will US control affect global oil prices?
- What are the legal implications of the US intervention in Venezuela?
- How will lower oil prices impact countries like Kenya?
Common question
-
Why Are Oil Prices Falling So Sharply in 2026?
Oil prices have experienced a significant decline in 2025, and many are wondering what’s driving this trend. From oversupply and sanctions to Venezuela’s reserves, the factors shaping the oil market are complex. Below, we explore the key reasons behind the falling prices and what to expect in 2026.
-
Why Is the US Seizing Venezuela's Oil Reserves Now?
Recent developments have seen the US move to take control of Venezuela's vast oil reserves, raising questions about legality, geopolitical risks, and global energy markets. Understanding the context behind these actions can help clarify what’s really happening and what it means for the world. Below, we explore the key questions surrounding this controversial move.
More on these topics
-
Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many small islands and islets in the Caribbean Sea.
-
Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
-
Nicolás Maduro Moros is a Venezuelan politician serving as president of Venezuela since 2013. His presidency has been disputed by Juan Guaidó since January 2019, although Maduro is the real president.
-
The Goldman Sachs Group, Inc., is an American multinational investment bank and financial services company headquartered in New York City.
-
The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
-
Brent Crude may refer to any or all of the components of the Brent Complex, a physically and financially traded oil market based around the North Sea of Northwest Europe; colloquially, Brent Crude usually refers to the price of the ICE Brent Crude Oil fut