The swift and successful U.S. operation to capture Venezuela's president. Nicolás Maduro, is likely to pressure oil and could unleash a reaction in other financial markets on Monday.
President Donald Trump announced the capture of Maduro and said the Venezuelan leader will be put on trial in the U.S. on charges of narcoterrorism.
While the U.S. operation against Venezuela did not come entirely out of the blue, the timing may have caught many by surprise. On the prediction market Kalshi, for instance, the market for Maduro leaving office before February was trading around 13 cents on the dollar.
The immediate focus of markets will be on oil (CL00) (BRN00), which already has lost 22% over the past 52 weeks.
Expectations are that a friendlier Venezuelan government could boost production - over time. MarketWatch has previously reported an estimate from Wood Mackenzie, a global research and consulting firm, that improvements and investments in Venezuela's infrastructure could lift its oil output to roughly 2 million barrels a day in one or two years. It may then take another decade, and billions of dollars in investment, to lift output by another 500,000 daily barrels.
From the archives (December 2025): Regime change in Venezuela could boost oil production - but maybe not as much as you'd think
Trump, speaking at his Mar-a-Lago resort in Florida, said U.S. oil companies XLE would "go in" to Venezuela, "spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country."
Ed Finley-Richardson, who has a Substack devoted to oil-tanker news, estimated on the social-media service X that oil prices will fall by 4% once trading resumes on Sunday.
He also noted that it could be helpful for U.S. refineries that use the heavy oil Venezuela produces and for subsea and oil-services companies that could be called upon. It would be harmful for Canadian producers of competing heavy oil, he said.
Trump told reporters the U.S. will "run" Venezuela until what he called a safe and judicious transition has taken place.
Venezuelan opposition leader María Corina Machado said in a statement that the opposition is ready to assume power. The Nobel Peace Prize winner has been supportive of Trump's strategy toward Venezuela, but Trump, in a press-conference remark, indicated that Machado was "nice" but lacked sufficient respect among Venezuelans to effectively lead the country.
Gold (GC00) usually is a safe-haven play during military conflict, but here the operation was swift, and gold prices already have surged 63% over the last year.
The Treasury market, meanwhile, could also benefit from lower oil prices, further reducing inflationary pressure. Then again, yields on the benchmark 10-year Treasury BX:TMUBMUSD10Y rose 5 basis points last week. Yields move in the opposite direction to prices.
The only market where there was actual trading during the U.S. military operation was the cryptocurrency market, where bitcoin (BTCUSD) prices were steady, perhaps indicative that U.S. stock markets similarly will not see a major move on the back of the operation.
The benchmark S&P 500 SPX fell 1% last week but has gained 15% over the last 52 weeks.