Prof G Markets — "What Venezuela’s Regime Change Means for Oil"

Date: January 6, 2026
Host: Ed Elson
Guests: Mark Zandi (Chief Economist, Moody’s Analytics), Bob McNally (Rapidan Energy Group Founder/President)
Theme: Analyzing Venezuela's recent regime change, its impact on the oil markets, and the broader economic outlook for 2026.

Episode Overview

This episode dives into two major topics:

• The U.S.-led removal of Venezuela’s President Maduro and its immediate and long-term implications for global oil markets.
• A look back at the 2025 U.S. economic forecasts (and results) with Mark Zandi, plus insights on what lies ahead for 2026: GDP, jobs, inflation, government spending, and deficits.

Ed Elson and his guests balance straight analysis, sharp skepticism, and blunt market realism, tackling both the geopolitics and market mechanics behind the headlines.

Key Discussion Points & Insights

1. 2025 Economic Scorecard & Lessons Learned

Guest: Mark Zandi (Moody’s Analytics)
Starting at: 02:32

Economic Predictions vs. Reality

• Ed Elson congratulates Mark Zandi on his 2025 forecasts: "Job growth, GDP growth, unemployment rate was pretty accurate." (02:49)
• Zandi remarks on the dramatic year: "We got it that close...lots of drama in 2025, lots of things going on: tariffs, immigration, Doge...Despite all of that, the numbers came in pretty close to what we thought they would at the start of the year." (03:28)

Biggest Surprises

• Mark Zandi: "The thing I took greatest pleasure in was jobs...Average monthly job growth in 2025 compared to 2024 was 125,000 on the nose." (03:41)
• Missed on asset prices: "The equity market was up 15%...We expected 10%. Even house prices...came in up 4, 3, 4%. We were expecting closer to 1, 2%." (04:24)
• Undershot inflation: "You forecasted 2.3%. It's higher than that." (05:12)

The ‘Flawed’ November CPI Report

• Ed was skeptical of the surprise CPI drop: "It showed that inflation actually slowed down to 2.7% in November, which totally shocked me." (05:29)
• Mark explains: Data was compromised by a government shutdown; the Bureau assumed "no change" for October prices where they lacked data — "That's a big deal...when it's 90% of the products that you're surveying, that's a big deal." (07:08)
• Actual inflation is likely closer to 3%, not 2.7%. “You were dead on to say something doesn’t feel right, because it wasn’t right.” (08:27)
• Quote: "This problem with the data is going to continue...until next October when we actually get some data. So that means we're going to be in this awkward position...for the next year." (08:53)

2. 2026 Outlook: Growth, Jobs, Deficits, and Stimulus

Guest: Mark Zandi
Starting at: 09:02

GDP Growth

• 2026 GDP forecast upped to 2.5% from 2.1% (2025).
• Driving factors: major fiscal stimulus ("the One Big Beautiful Bill Act" — OBBA), including deficit-financed tax cuts and corporate incentives. (09:34)
• Quote: “You don’t get the juice, you don’t get the economic growth, unless you’re borrowing the money to finance it.” (11:02)

Tax Refund Windfall

• Households to see "$100 billion in additional money" in refunds due to lagged withholding changes. (11:34)
• "That's going to juice things up." (11:39)
• Notably timed for election year stimulus: "The idea: juice up the economy as you get into the election process..." (11:51)

Federal Deficit, Jobs, and Inflation

• Deficit projected at $2.1 trillion fueled by stimulus, despite Trump's past “balance the budget” rhetoric. (12:00)
• Unemployment forecast at 4.6%: “Basically saying unemployment is going to level...it's already at 4.6 going into the year.” (12:53)
• Inflation forecast to tick up to 3.1%: “That’s the dark side...it’s going to be uncomfortable, right?" (13:19)

Mark Zandi [13:43]: “It’s going to feel—the year’s going to feel okay, just...but not quite right. And then of course we’re left with those bigger budget deficits to deal with down the road.”

3. Venezuela Regime Change: What It Really Means for Oil

Segment starts: 16:21
Guest: Bob McNally (Rapidan Energy Group)

Background on Maduro's Removal

• U.S. captured President Maduro in a high-risk raid. U.S. "plans to, quote, run the country until a transition is complete." (16:21)
• Elson frames it as "really an oil story." Venezuela has world's largest oil reserves, but only produces ~1% global supply now.
• Chevron, ExxonMobil stocks jumped on hope of U.S. firms getting first access, but "getting production back to prior levels could take years and over $100 billion." (16:48)

Initial Reactions

Bob McNally [17:45]: “We weren’t surprised...We told clients on December 15th we raised our odds of removing Maduro from 60 to 70%. ...So it was a question of whether Maduro would leave on a Gulfstream 3 and go to an apartment in Madrid or be taken out in a jumpsuit.”

• Removal execution drew comparisons (and contrasts) with the 2003 Iraq War:
  • Iraq: "Decisive regime removal," multi-national contracts
  • Venezuela: No full regime change, no “plan for the day after,” but oil is openly a top U.S. priority (19:13)

The Realities of Venezuelan Oil

• Venezuela produces < 1mbpd (down from 3mbpd 25 years ago). (20:57)
• Huge reserves, but "all coffee grounds"—heavy, dirty oil needing expensive refining.
  • “Oil ranges in quality...US shale is like champagne...Venezuela is the coffee grounds variety.” (21:32)
• Decades of mismanagement: “Chavez...kicks the US companies out...runs the place into the ground.” (22:16)
• Reviving oil output will take “years to decades and tens of billions of dollars.” (23:38)

Bob McNally [23:59]: “Now the good news is...toward the end of last year, this [‘peak oil demand’] narrative really began to break down...the world is starting to realize, oh boy, we need a lot more oil after 2030 than we thought...And this is where the timing is perfect for Venezuela to come on.”

Who Will Control Venezuela’s Oil?

• U.S. oil companies are eager, but risks abound: Long time-to-payoff, regime instability, possibility of future political reversals, and alternative global options for capital. (26:46)

Bob McNally [28:07]: “An oil company would have to be confident that it can manage these risks for decades...betting that the US Government is going to be a solid financial or political partner, given the volatility we’ve seen politically here, I don’t think that’s a bet they would easily take.”

4. Host’s Editorial: Is This About Justice or Just Oil?

Ed Elson—Closing Monologue
Starting at: 29:27

• Skeptical of the official narrative: "If you want to know the truth, do not read the press release. ...read and observe what's happening in the markets, because the markets usually tell you the real story." (32:19)
• Lists American oil stocks’ dramatic gains post-invasion: “In just a few days, US oil stocks have added more than $100 billion in market value.” (33:24)
• Conclusion:

Ed Elson [33:50]: “This invasion, just like any other imperial or colonial operation, is simply about money. ...taking over another country, occupying their territory, seizing their assets, especially if they’ve got oil—that is a very profitable business. ...this is really imperialism in its purest form.”

• Emphasizes need for honest conversation, not PR spin: “It’s not about Maduro. It’s not about human rights. It’s not even about socialism. No, as always, this is about money.” (34:54)

Notable Quotes & Timestamp Highlights

• Mark Zandi (on job forecast):
  “Average monthly job growth in 2025 compared to 2024 was 125,000 on the nose. And our forecast, 124,000 per month.” (03:41)

• Mark Zandi (on flawed inflation data):
  “When it’s 90% of the products that you’re surveying, that's a big deal. ...You were dead on to say something doesn’t feel right, because it wasn’t right.” (07:08/08:27)

• Bob McNally (on Venezuela’s reserves):
  “Oil ranges in quality ... US shale is like champagne ... Venezuela is the coffee grounds variety.” (21:32)
  “Getting it back up and running is going to be a mammoth undertaking measured in years to decades and tens of billions of dollars.” (23:38)

• Ed Elson (on market reactions):
  “If you want to know the truth, do not read the press release ... read and observe what’s happening in the markets, because the markets usually tell you the real story.” (32:19)

• Ed Elson (on motives for intervention):
  “This is expansionism. This is interventionism. This is really imperialism in its purest form. ...It’s not about Maduro. It’s not about human rights. It’s not even about socialism. No, as always, this is about money.” (34:49/34:54)

Important Timestamps for Key Segments

• 2025 Economic Recap & Surprises: 02:32–09:02
• 2026 Outlook – GDP, jobs, stimulus: 09:02–14:21
• Venezuela’s Regime Change – markets perspective: 16:21–29:20
• Editorial: The truth behind the invasion: 29:27–34:54

Conclusion

This episode of Prof G Markets offers a clear-eyed, sometimes biting look at the intersection of geopolitics, oil, and money. The hosts break down both the ‘why’ and the ‘how’ of Venezuela’s regime change, question media/government narratives, and translate the market’s real signals. Economic analysis is pragmatic, not cheerleading; discussion of Venezuela is bluntly realistic about motives, mechanics, and risks.

For listeners seeking to cut through official PR and investor hype, this is an informed, no-nonsense breakdown of a world-shaking event and the market impulses behind it.