S&P Global Energy Forecast Unchanged by VEN Developments

S&P Global Energy’s forecast remains unchanged by Venezuela developments, an analysis piece sent to Rigzone by the S&P Global team late Monday stated.

The analysis piece – by Jim Burkhard, Vice President and Global Head of Crude Oil Research, and the S&P Global Energy Crude Oil Markets team – outlined that S&P Global Energy is still projecting a 1.4 million barrel per day global crude oil stock build in the first quarter of this year. The analysis also outlined that S&P Global Energy is still calling for Dated Brent to average $60 per barrel.

“However, there could be a more discernible impact on the heavy sour crude oil market,” the analysis piece stated.

“Venezuela accounts for one percent of global crude oil production but roughly nine percent of the world’s nine million barrels per day of heavy crude oil production. The United States and China are the world’s largest markets for heavy crude oil,” it added.

“Global heavy crude/heavy residual feedstock markets are currently narrowly balanced. Higher supply would be bearish for heavy sour crude differentials and high-sulfur fuel oil (HSFO) cracks. Lower supply would be modestly bullish,” it continued.

The analysis piece stated that, in 2025, Venezuela produced an average of 826,000 barrels per day of crude oil, excluding imported diluent that is blended into domestic production. Crude oil exports, including blended diluent, averaged 750,000 barrels per day, according to the analysis.

“Before Jan. 3, S&P Global Energy had already assumed a reduction in supply from Venezuela due to U.S. efforts to curtail exports on sanctioned oil tankers, and the view remains the same,” the analysis noted.

“While S&P Global Energy sees risk to the upside and downside in terms of production and exports, it is not enough either way to significantly alter the global oil balance in the first quarter,” it added.

“If sanctions were removed, Venezuelan oil production could grow but it would require at least several billion dollars or more of fresh investment to boost marketed production to 1.5 million barrels per day in the next 12-24 months – an increase of roughly 500,000 barrels per day from recent levels (including blended diluent),” it continued.

In the analysis piece, Burkhard stated that recent developments in Venezuela do little to alter the fact that the global oil market is facing a surplus at the start of 2026.

In a statement sent to Rigzone by the Morningstar team late Monday, which focused on the Venezuela situation, Morningstar’s director of equity research, Joshua Aguilar, said, “we don’t plan to alter our fair value estimates or our midcycle oil price estimates of Brent $65 per barrel and WTI $60 per barrel”.

“While significant Venezuelan supply increases to global markets could be bearish for our 10-year forecast, we think it will take years for supply to meaningfully increase,” he added. 

“Venezuela will require years of large capital investments to modernize its infrastructure,” he continued.

In a comment sent to Rigzone early Tuesday, Aaron Hill, Chief Market Analyst at FP Markets, noted that the “Venezuela crisis trigger[ed]… [a] rally in commodities”.

“Crude markets … found support, with WTI rallying nearly 2.0 percent as the intervention cast fresh uncertainty over access to oil reserves,” Hill said.

In a statement sent to Rigzone on Monday morning, Naeem Assam, Chief Analyst at Zaye Capital Markets, noted that “oil remains range bound, with Brent near $60.9 per barrel and WTI around $57.4 per barrel, underscoring that macroeconomic weakness is outweighing geopolitical risk”.

“Despite U.S. actions tied to Venezuela and rhetoric from Donald Trump regarding control of Venezuelan oil assets under Nicolas Maduro, price reaction has been muted – clear evidence of headline exhaustion,” he added.

In a news conference held on January 3 in Mar-a-Lago, Florida, which was streamed by Sky News, U.S. President Donald Trump stated, “late last night and early today, at my direction, the United States Armed Forces conducted an extraordinary military operation in the capital of Venezuela”.

To contact the author, email andreas.exarheas@rigzone.com