Oil prices and shares in major US energy companies rose sharply yesterday following the weekend capture of Venezuela’s president, Nicolas Maduro.
Venezuela, a member of Opec, holds around 17% of the world’s proven crude reserves but produces less than 1% of global output after years of under-investment, sanctions and a naval blockade.
US president Donald Trump said he intends to rebuild the country’s oil infrastructure, stating that US energy firms “want to go in so badly".
He said: "We’re going to have the big oil companies going and they’re going to fix the infrastructure. They’re going to invest money.”
Shares in Chevron, the only US major currently operating in Venezuela, rose 5.1%, while Exxon Mobil hit a record high.
Analysts at JP Morgan said US action could lead to the return of assets seized by Venezuela in 2007, noting: “In total, ConocoPhillips has outstanding claims approaching $10billion, while Exxon’s outstanding damages appear to be in the $2billion range, against their original claims that exceeded $15billion.”
Brent crude rose 1.6 per cent to $61.69 a barrel, though analysts said that in a well-supplied global market, any further disruption to Venezuelan exports would have limited short-term impact, with the embargo on Venezuelan oil exports still in force.
However, the Financial Times reports that European energy companies are already struggling with political risk in Venezuela.
According to the FT, Italy’s Eni and Spain’s Repsol are attempting to recover around $6billion in unpaid debts after supplying gas and naphtha to Venezuela for several years, while receiving no payment since US sanctions were tightened.