Podcast Summary: Exchanges by Goldman Sachs

Episode: Oil Market Impacts from Venezuela

Date: January 6, 2026
Host: Alison Nathan
Guest: Dan Striven, Co-head of Global Commodities Research

Overview

This episode focuses on the dramatic political developments in Venezuela—most notably the capture of President Maduro by the US— and how these events might impact global oil markets and other commodities. The discussion covers both immediate and long-term implications for oil supply, pricing, investment, and the shifting dynamics between the US, Venezuela, and China. Notably, the episode offers perspective on the market's muted short-term reaction, the unique properties of Venezuelan oil, and the broader context of geopolitical competition.

Key Discussion Points & Insights

1. The Situation in Venezuela: Political Shocks and Oil Market Implications

• President Maduro's Capture: Over the weekend, Venezuela’s President Maduro and his wife were captured by the US on drug trafficking charges. VP Delcy Rodríguez is now the interim leader.
• No Immediate Supply Disruption: So far, Venezuelan oil production continues undisrupted.
  • "[Venezuela] is an important oil producer, I should say potential oil producer accounting for about 1% of global production but 20% of global reserves." — Dan Striven [00:47]

2. Initial Market Reaction: Calm but Cautious

• Muted Response: Oil prices rose about $1; markets are awaiting clear signals.
• Ambiguous Short-Term Effects:
  • Risks of further blockade/disruptions vs. potential for increased investments and higher production if US firms reengage.
  • Both supply disruption and supply growth are possible, leading to minimal net impact right now.
  • "The net impact is ambiguous and I think that's the key reason why oil markets are up only slightly on the day." — Dan Striven [01:58]

3. Short-Term Supply Swing: Limited Impact

• Production Levels: Venezuela is producing around 800,000 barrels per day (kbd), about 1% of global supply.
• Potential Swings: Upside or downside risk is around +/- 300-400 kbd, yielding a possible price move of only about $2 per barrel.
  • "Running that to our models, that implies asymmetrical risk to oil prices from production in the next year of around plus or minus $2 per barrel. So relatively limited." — Dan Striven [02:54]

4. Long-Term Potential: Vast Reserves and Heavy Oil

• Unique Asset: Venezuela possesses the world’s largest oil reserves—mostly heavy, premium diesel-rich crude.
  • "There’s really a scarcity of this heavy special Venezuelan oil. Moreover, US refiners ... are perfectly set up to treat and process these very heavy oil and make high margins." — Dan Striven [04:11]
• US Interest: President Trump has stated the US will be "very strongly involved" and aims to "get the oil flowing the way it should be."
  • US oil majors' stock prices have responded positively, reflecting market optimism.

5. Understanding Heavy vs. Light Oil

• Technical Differences: Heavy oil is dense and requires extra processing in "upgraders". The end products, especially diesel, command premium pricing compared to lighter oils (which yield more gasoline).
  • "It’s more work. But it’s also more valuable because the products you make from heavy oil such as diesel, are priced at a higher price ..." — Dan Striven [04:48]

6. Barriers to Quickly Ramping Production

• Degraded Infrastructure: Years of mismanagement mean recovery will require major investment, policy stability, and guarantees for foreign investors.
  • "It will all depend, I think, on the conditions and the guarantees for oil investment by US companies." — Dan Striven [05:22]

7. Production Outlook: Investment-Driven Potential

• Supply Growth Scenarios:
  • Base Case: Could rise to 1.5 million bpd by 2030 (a 50% increase)
  • Bullish Case: With robust US investment, up to 2 million bpd (double today's levels)
  • Price Impact: In the upside case, Goldman estimates oil prices could be $4 lower per barrel by 2030 due to extra Venezuelan supply.
  • "If you see very significant investment ... in this bullish case ... oil prices should be about $4 per barrel lower by 2030." — Dan Striven [06:36]

8. Investment Considerations: Above-Ground Risks Are Paramount

• Need for Incentives and Stability: Key questions concern tax rates, infrastructure, political risk, and the threat of re-nationalization.
  • "The challenges are above the ground ... If we get the above the ground incentives in place, I think it will be quite plausible to argue that production will rise." — Dan Striven [07:19]

9. Implications for Other Oil Producers

• Winners: US majors with a Venezuela presence, and US Gulf Coast refiners.
• Losers: US shale producers (potentially lower price/volumes); European oil majors; Chinese consumers of fuel oil and refined products.
  • "It could also be negative for shale producers that don’t have this footprint in Venezuela, both because of a potentially lower price and perhaps also because of lower volumes." — Dan Striven [08:15]
  • "President Trump has argued that oil has to flow the right way, which I think means to the US and to the west rather than to the East." — Dan Striven [08:48]

10. Geopolitical Ripple Effects Beyond Oil: Gold Market Moves

• Gold Price Up: Rose ~3% as investors seek safe havens amid rising geopolitical tension and the US-China power rivalry.
  • "This development underscores the theme from our commodity outlook in 2026, which is ride the China US power race and go long gold." — Dan Striven [09:30]
• Central Bank Demand: US-China rivalry increases incentives for central banks (especially in China and other emerging markets) to diversify reserves into gold.

Notable Quotes & Memorable Moments

• On the ambiguous market reaction:

  • "The net impact is ambiguous and I think that's the key reason why oil markets are up only slightly on the day." — Dan Striven [01:58]

• On the unique value of Venezuelan crude:

  • "There’s really a scarcity of this heavy special Venezuelan oil. Moreover, US refiners ... are perfectly set up to treat and process these very heavy oil and make high margins." — Dan Striven [04:11]

• On the necessary conditions for reviving Venezuelan oil:

  • "It will all depend, I think, on the conditions and the guarantees for oil investment by US companies." — Dan Striven [05:22]

• Forecast for oil prices in an upside supply scenario:

  • "Oil prices should be about $4 per barrel lower by 2030 because of the extra supply from Venezuela in this upside supply scenario." — Dan Striven [06:36]

• On the strategic rationale for gold:

  • "Ride the China US Power race and go long gold, because it’s very well positioned for additional demand, especially from central banks." — Dan Striven [09:30]

Timestamps of Key Segments

• [00:42] – Venezuela’s recent political developments & oil market context
• [01:29] – Initial oil market reaction & ambiguity in pricing
• [02:35] – Current production and size of supply swing
• [03:45] – President Trump’s comments; implications for US involvement
• [04:40] – Explanation of heavy vs. light oil and its market value
• [06:16] – Potential for supply growth and long-term oil pricing impact
• [07:15] – The critical need for investment guarantees and above-ground security
• [07:58] – Effects on US and global oil producers
• [09:16] – Gold price reaction and interpretation in geopolitical context

Conclusion

This episode provides a nuanced look at the interplay between dramatic political developments in Venezuela and the global oil and commodities markets. The hosts stress that while the short-term market response has been measured due to near-term ambiguities, the long-term potential—contingent on policy, investment, and infrastructure—could be enormous. Venezuela’s heavy oil is uniquely significant to US refiners, and its reintegration to global markets would have wide-ranging effects on pricing, investment decisions, and geopolitical alignments, while also reinforcing bullish sentiment for gold amid great power rivalry.