(Source: China-Singapore Jingwei 2026-01-04)

Dong Xiucheng

At around 11:40 a.m. Eastern Time on the 3rd (around 0:40 a.m. on the 4th, Beijing time), U.S. President Trump held a press conference at Mar-a-Lago in Florida to reveal more details about the military attack on Venezuela and the capture of Venezuelan President Maduro.

Trump said that he will let large American oil companies enter Venezuela, invest billions of dollars, repair severely damaged infrastructure, especially oil infrastructure, and start generating profits and "start making money for Venezuela."

Trump says the embargo on all Venezuelan oil remains in full effect. Trump said the United States will allow oil to "restore normal supplies" and ensure that the Venezuelan people are "properly taken care of."

Trump also stated that "the United States' dominance in the Western Hemisphere will never be questioned again."

FireWire Interpretation! International oil prices face “jumping” pressure

U.S. President Trump said in the early morning of the 3rd local time that the U.S. military would launch a large-scale military attack on Venezuela. The Venezuelan government said in a statement that the United States launched the attack to seize Venezuela's oil and mineral resources.

The US attack on Venezuela can be said to be a major energy geopolitical event, because Venezuela is the country with the largest proven oil reserves in the world and has an important strategic position in the world oil market. In the short term, global heavy crude oil supply may shrink significantly, potentially causing international oil prices to jump. In the long term, the global oil market structure is likely to undergo major changes.

1. Impact on the global oil market

In the short term, Venezuela’s oil exports are expected to shrink significantly, impacting market supply and demand. As an important supplier of heavy crude oil to the world, Venezuela's production cuts will undoubtedly have a huge impact on the global crude oil market. The tight supply of heavy crude oil will likely cause international oil price indicators such as Brent and WTI (West Texas Intermediate) to jump in the short term. This will not only directly affect consumers' refueling costs, but will also indirectly push up the prices of petroleum products such as diesel and asphalt, which will have a profound impact on the global economy.

In addition, the imbalance of refinery raw materials will also pose serious challenges to the global refining industry. In particular, Asian and European refineries that are highly dependent on Venezuelan heavy crude oil will face shortages of raw materials, which may cause some refineries to have to reduce or suspend production. This will further exacerbate tensions in the global crude oil market and may trigger a new round of rising oil prices.

In the medium to long term, OPEC+ (OPEC+) has a surplus production capacity of approximately 5.2 million barrels per day and has the ability to gradually fill the market gap. The increase in oil prices will still be limited by fundamentals and gradually return to a balance between supply and demand. As time goes by, the market will gradually adapt to the new supply and demand pattern, and oil prices will also show a steady downward trend. However, in this process, the evolution of the geopolitical conflict between the United States and Venezuela will directly affect the degree of turmoil in the oil market.

In addition to the impact on the supply side, changes in transportation and inventory cannot be ignored. Rising shipping risks in the Caribbean will lead to increased transportation costs, which will undoubtedly further increase pressure on oil prices. The above factors working together may drive oil prices to fluctuate violently and increase market uncertainty.

2. Reconstructing the supply chain pattern

Under the impact of this major geopolitical event, the international crude oil market may face reshaping.

On the one hand, U.S. companies may rely on their strong financial and technological strength to return to the region after the regime change in Venezuela and obtain the right to exploit the low-cost Orinoco heavy oil belt. This will cause the focus of crude oil exports to shift to the United States and strengthen the position of the petrodollar.

On the other hand, for traditional buyers such as India, they will have to seek alternative sources of crude oil, such as heavy crude oil from West Africa and the Middle East. This will drive up the price of these alternative resources and change the flow of global crude oil w88.

At the same time, due to the special quality of Venezuelan crude oil, refineries that rely on this resource may need to adjust their processes to adapt to new crude oil varieties, which may also have an impact on the cost structure of the refining industry.

In addition, geopolitical conflicts may also trigger disruptions or restructuring of crude oil supply chains. Once key transportation channels are damaged or control is changed, it will have a profound impact on global crude oil flows. Therefore, governments and companies of various countries need to pay close attention to changes in the geopolitical situation and prepare for responses in advance.

With the violent market fluctuations, the profit distribution pattern of the upstream and downstream crude oil industry chain may change. Upstream producers will be among the biggest beneficiaries, while downstream consumers may face higher fuel costs. In addition, as the volatility of crude oil prices increases, investors will be more cautious and rational in investing in the crude oil industry chain.

3. The recovery of oil production capacity may accelerate

From a realistic perspective, Venezuela’s crude oil facilities are seriously aging, and many of the oil pipelines have not been updated for more than 50 years. This means that large-scale equipment updates and maintenance work need to be carried out before production capacity can be restored. Secondly, Venezuela’s economic situation is poor and it lacks sufficient funds to support the development of the crude oil industry. It is estimated that approximately US$58 billion in investment will be needed to restore Venezuela's peak crude oil production capacity to historical levels. This is undoubtedly a huge burden for a financially strapped country.

In this context, the intervention of US companies may become the key to restoring Venezuela's crude oil production capacity. However, this cooperation also means that Venezuela’s oil industry will be more deeply bound to U.S. interests. In the future, the pace of recovery of Venezuelan crude oil production capacity and the scale of investment may be dominated by the decisions of U.S. companies. This not only brings opportunities for financial and technical support to Venezuela, but also creates uncertainties for the long-term development of its crude oil industry.

From a more macro perspective, changes in Venezuelan crude oil production will have a profound impact on the global crude oil market structure. As Venezuela's power declines, the center of gravity of global crude oil supply will gradually shift to other countries. This may further increase the volatility of global crude oil prices and affect the stable development of the global economy.

4. Influence on the evolution of the oil pricing system

By controlling Venezuela’s crude oil resources, the United States aims to weaken OPEC+’s influence in the global oil market. OPEC+ originally served as a united front to coordinate the oil production policies of member countries to achieve the purpose of stabilizing market prices. However, the intervention of the United States has dispersed and even disintegrated the power of this alliance.

In addition, the United States is actively promoting the further strengthening of petrodollar hegemony. The petrodollar means that in the process of performing the world reserve function, the U.S. dollar uses oil as a link through a floating exchange rate system and uses the U.S. dollar as the trading, pricing and settlement currency of international commodities through the use of control over oil. In the process of performing the world reserve function, the U.S. dollar brings many economic benefits to the United States.

In order to get rid of dependence on the US dollar and maintain their own energy security, countries should actively take measures to speed up the adjustment and diversification of their energy structure. This includes not only increasing the research, development and application of domestic clean energy, but also actively seeking cooperation with international partners to build a more diversified energy supply chain. At the same time, countries should also strengthen the construction and management of strategic oil reserves to ensure the security of their own energy supply at critical moments.

(The author is the Executive Dean of China International Carbon Neutral Economic Research Institute, w88 casino)

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