Geopolitical risks are back on the agenda for the oil market after US forces captured Venezuela's President Nicolas Maduro, ANZ Research said in a note on Tuesday.
It remains unclear how Venezuela's political situation will evolve. Heightened levels of political instability are likely in Venezuela, which would lead to the risk of supply disruptions remaining elevated in the short term.
The country's oil production fell from around 2.3 million barrels per day in 2015 to only 230,000 barrels per day in late 2020 in the wake of mismanagement, underinvestment, and widespread infrastructure deterioration.
A significant injection of funds would be required to boost output beyond Venezuela's current effective capacity of a million barrels per day, equating to $10 billion to $30 billion for an additional one million barrels per day capacity.
