Opec+ opts for caution as US takeover of Venezuela oil adds supply risks

Opec+, led by Saudi Arabia and Russia, kept oil output unchanged as global oversupply risks collide with the US removal of Venezuela’s president and plans for US companies to run the country’s oil assets. The move reflects caution as new Venezuelan barrels could hit markets amid weak demand and rising supply.

After returning 2.9 million barrels a day to the market since April last year, the group paused production increases for the first quarter of this year and reaffirmed that stance at an online meeting on Sunday.

Opec+ is currently unwinding 1.65 million bpd of voluntary cuts announced in April 2023, following the earlier rollback of 2.2 million bpd of reductions first agreed in November 2023 and put into effect from April last year.

“The eight participating countries reiterated that the 1.65 million bpd may be returned in part or in full, subject to evolving market conditions and in a gradual manner,” the alliance said in a statement.

The producers, including Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman, also reaffirmed the need for a cautious approach and full flexibility to pause or reverse additional voluntary supply increases, including those linked to the 2.2 million bpd cuts announced in November 2023.

The group will hold its next meeting on February 1, 2026.

The meeting followed a dramatic escalation involving Opec member Venezuela, after the US launched an operation to detain the country’s President Nicolas Maduro and transfer him to the US to face narco-terrorism charges.

President Donald Trump said major US oil companies would invest billions of dollars in Venezuela to rebuild its oil infrastructure and generate revenue for the country.

Chaotic handover concerns

Venezuela is one of Opec’s founding members, alongside Saudi Arabia, Iran, Iraq and Kuwait. Home to the world’s largest proven oil reserves, the country produces about 1.1 million bpd of crude, with most exports flowing to China and India, according to Rystad Energy. While that accounts for just around 1 per cent of global oil trade, the output is distinctive, with more than 67 per cent classified as heavy crude

Moment Nicolas Maduro arrives in US after capture by military 00:40

Helima Croft, head of global commodity strategy and Mena research at RBC Capital Markets, said Venezuela could unlock several hundred thousand barrels a day of additional output within a year if sanctions are eased and there is an orderly transition of power.

She cautioned that a chaotic handover, similar to those seen in Libya or Iraq, could derail any production gains, and said Iran may now reassess its strategy to avoid a comparable US-led intervention following President Donald Trump’s warnings of possible military action this week.

She also said Mr Trump's plans puts a heavy bur