Will U.S. Action On Venezuela Trigger A Global Oil Price Surge?

By Sanjay Bajrabahu
The Eastern Times | World Affairs Desk

A possible U.S. military strike or naval blockade on Venezuela could quickly lift global oil prices, at least in the short term. Even the threat of action adds risk premiums to the market. Here is how and why it matters.

Why Venezuela matters

Produces around 700,000 to 800,000 barrels per day, about 1 percent of global supply.
Most crude exports go to China, with some shipments to Asia and the Caribbean.
Venezuelan oil is heavy and not easily replaced.
Even small disruptions can move prices sharply in a tight market.

What a U.S. blockade or attack could do

If Washington escalates pressure, it could:

Block tankers, slowing or halting exports.
Target oil infrastructure, reducing production.
Expand sanctions, discouraging buyers, shippers and insurers.

Result:

Immediate fear of supply losses, even before barrels actually disappear.

Likely impact on oil prices

Short term (days to weeks):

Brent could rise by $3 to $8 a barrel on geopolitical risk.
Gains could be sharper if Russia-Ukraine tensions also worsen.

Medium term:

Prices may cool if disruption is brief.
Prolonged export blocks could push Brent toward $65 to $70 or higher.

Long term:

Higher output from Saudi Arabia or U.S. shale could offset losses.
Weak global demand could cap sustained rallies.

Why prices may not surge dramatically

A major spike may be limited if:

Enforcement is symbolic or selective.
China finds ways to keep imports flowing.
Global demand remains soft.
OPEC and its allies use spare capacity.

Markets price risk, but fundamentals still matter.

Market psychology and escalation risks

Oil reacts not just to lost supply, but to fear of escalation:

Risk of clashes involving Russia-linked shipping.
Wider instability in the Caribbean.
Threats to regional energy routes.

Even strong rhetoric or headlines can lift prices.

What it means for India and other importers

If crude rises:

Petrol and diesel could become costlier.
Inflation pressure may increase.
The rupee could face stress.
Government subsidy burdens may rise.

The impact would be felt most by ordinary consumers.

Bottom line

Any U.S. military action or hard blockade on Venezuela is likely to push oil prices higher in the short run.
The surge would be driven by supply fears and geopolitical risk premiums.
The scale and duration will depend on:
- How long disruptions last.
- OPEC response.
- Global demand conditions.
- Whether tensions spread beyond Venezuela.

The Eastern Times View

The Venezuela flashpoint shows how fragile the global energy system remains.
Even a producer with a small share of world supply can shake markets when geopolitics intensifies.
For India, it underlines the need to strengthen strategic reserves, diversify energy sources and speed up the shift to cleaner alternatives.
As power politics reshape energy flows, consumers ultimately bear the cost.

Also read :https://theeasterntimes.com/us-strikes-drug-cartels-legal-condemnation/

https://theeasterntimes.com/us-strikes-drug-cartels-legal-condemnation/

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