Oil Prices Whipsaw as Traders Weigh Venezuela Risks and Supply Prospects

By Blessing Nweke

Oil prices swung in volatile trading Sunday evening as investors weighed the competing forces unleashed by President Donald Trump’s military intervention in Venezuela and his comments about the country’s vast oil reserves.

U.S. crude oil, known as West Texas Intermediate, fell when trading opened at 6 p.m. ET, then climbed as much as 0.5% before retreating again shortly after 10 p.m. The international benchmark Brent crude followed a similar path and, by late evening, was trading slightly below its opening level.

Markets were reacting to uncertainty following the capture of Venezuelan leader Nicolás Maduro and Trump’s suggestion that U.S. oil companies could eventually help revive the nation’s battered energy sector. Trump said American firms could invest billions of dollars to repair infrastructure and restart production, raising the prospect of significantly higher oil output in the future.

Traders appeared to be balancing two opposing scenarios. On one hand, fears of broader instability in Latin America, potential military conflict and a political power vacuum could drive oil prices higher by increasing geopolitical risk. On the other, Venezuela’s eventual return as a major oil producer would add supply to global markets, putting downward pressure on prices.

Any recovery, however, is expected to be slow and costly. Restoring Venezuela’s energy industry would likely take years and billions of dollars in investment. The state-owned oil company PDVSA has previously estimated that at least $8 billion would be required just to return infrastructure to 1990s levels, and it remains unclear who would provide the capital or assume the risks.

Investor caution was evident across markets. U.S. stock index futures were only marginally higher, while demand for safe-haven assets surged. Gold jumped more than $70, or over 1.6%, and silver rose nearly 5%.

Separately, OPEC decided Sunday to keep its collective oil output unchanged, offering no comment on developments in Venezuela. Despite holding the world’s largest proven oil reserves, Venezuela currently exports little crude due to years of underinvestment.

With oil prices already posting their steepest annual declines since 2020 in 2025, analysts say markets remain wary of a looming global supply glut, reinforcing a cautious mood among traders.