Market Insights: Why Didn’t Oil React to Venezuela? 🇻🇪

🛢️ How did oil markets react to US action in Venezuela?

Maduro is out. Uncertainty is in.

What will US involvement in Venezuela mean for investors and the oil industry? Well, the answer is both “a lot,” and “a little.” Investors need to know the whole story to adjust to the new setting. 

In today's Market Insights edition, we’ll break down the state of the Venezuelan oil industry, how investors may want to respond, and the emerging risks. 

This week's Market Insights is a 6 minute read! Full article here

Quote of the week

“Courage, determination, and hard work are all very nice, but not so nice as an oil well in the backyard.”

Mason Cooley

What Happened In The Markets This Week?

Here’s a quick summary of what’s been going on:

🥈 Silver goes over US$90/oz as Fed chaos sends investors to hard assets (Forbes)

• Silver went as high as US$93/oz – its highest ever – as investors piled into metals following a DOJ probe into Fed Chair Powell.

• The spike is also tied to China’s silver export limits, industrial demand from AI and EV sectors, and safe-haven flows.

• With the Fed’s independence now being openly questioned, silver is becoming the risk hedge of choice – more volatile than gold, but also faster-moving.
• Traders might have to brace for turbulence: CME raised margin requirements after the surge.
• The setup echoes early 2021’s silver squeeze… except this time, the drivers are institutional and not Reddit-fueled.

🇹🇼 Taiwan to pour $250B into US chipmaking under new trade deal (CNBC)

• Taiwanese firms will invest $250B to build fabs in the US, and get major tariff relief in return.

• TSMC (TSM) is expanding in Arizona, with US officials aiming to relocate 40% of Taiwan’s chip supply chain stateside.

• Companies that don’t comply could face 100% tariffs – a sharp push to localize critical tech.

• For investors, this isn’t just supply chain diversification – it’s a geopolitical reshuffle with clear winners in US-based chip infrastructure.

• This deal could be a game-changer for US fabless chipmakers too, reducing lead times and derisking geopolitical exposure.

To see our take on these market stories below, simply check out the full article!

• 💸 Saks Global files for bankruptcy after Neiman merger flop

• 🛒 Alibaba rallies on AI shopping spree ambitions

• 🛫 Boeing beats Airbus in orders for first time since 2018

Now let’s dive into the main piece.

The state of Venezuela's oil industry

Venezuela produces about 800,000 barrels per day (bpd). 

In contrast, the US produces about 13 million bpd of crude oil. Saudi Arabia and Russia hold the second- and third-largest spots at 11 million and 10 million bpd, respectively.

So when news of Maduro's capture flooded headlines, only a few oil stocks have actually moved: Chevron (CVX) surged about 5%, ExxonMobil (XOM) shares jumped by about 2.5%, and ConocoPhillips (COP) increased by roughly 3.1%. 

So why is the US trying to gain control of Venezuela's oil?

Well, the country has more than 300 billion barrels of proven oil reserves, giving the industry significant potential.

In fact, Venezuela’s crude oil production dropped dramatically around 2017 when the US placed sanctions on the country. This move was a reaction to growing repression in the country as Maduro attempted to consolidate power.

Even before the sanctions, nearly every US oil company has stayed away from Venezuela given the country’s history of nationalizing assets. In fact, ExxonMobil's CEO Darren Woods recently told Trump that Venezuela is “uninvestable” under today’s conditions.

Venezuela Oil Production – CEIC Data

Big geopolitical headlines don’t always lead to big market moves.

The removal of Venezuela’s leadership grabbed attention,
but as you can see, oil markets barely flinched.

Our full article covers:

🛢️ Why Venezuela’s oil industry matters less to global supply than the headlines suggest and why its current production is too small to move prices meaningfully.

🌍 What the muted reaction tells us about today’s oil market including oversupply, inelastic demand, and why additional barrels may not change the picture.

📉 Where the real market impacts may show up instead

⚠️ How investors can think about risk and positioning in a more uncertain geopolitical backdrop as volatility and second-order effects matter more than headlines.

💬 Join the discussion by leaving a comment!

Do you think recent geopolitical shocks are being underpriced or are markets right to stay calm?

Key Events During the Next Week

Monday

• 🇨🇳 China GDP Growth Rate (Q4)

  • 📉 Forecast: 4.6%, Previous: 4.8%

  • ➡️ Why it matters: China’s growth trajectory sets the tone for global demand. Any downside surprise would pressure commodities and exporters, while a resilient print could lift sentiment across Asian and Australian markets.

Tuesday

• 🇨🇦 Canada Inflation Rate YoY (Dec)

  • 📉 Forecast: 2.1%, Previous: 2.2%

  • ➡️ Why it matters: Inflation hovering near target gives the Bank of Canada more flexibility. A softer print would strengthen expectations for rate cuts and support rate-sensitive assets.

Wednesday

• 🇬🇧 UK Inflation Rate YoY (Dec)

  • 📉 Forecast: 3.1%, Previous: 3.2%

  • ➡️ Why it matters: UK inflation remains well above target. A slower pace would ease pressure on the Bank of England, while a sticky reading keeps rate cuts on hold and weighs on growth expectations.

Friday

• 🇺🇸 US GDP Growth Rate QoQ (Q3, Final)
  
  • 📈 Forecast: 4.3%, Previous: 3.8%
  • ➡️ Why it matters: This confirms how strong the US economy was heading into year end. Markets will focus on whether growth is cooling fast enough to support Fed rate cuts in 2026.

Earnings season is ramping up this week with these companies due to report:

• Johnson & Johnson (JNJ)

• Netflix (NFLX)

• Visa (V)

• LVMH-Moet Hennessy (MC)
• Procter & Gamble (PG)
• Intel (INTC)

   

Until next week, invest well.

Simply Wall St