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Saudi Minister Claims in Davos That Venezuelan Crisis and U.S. Plans to Increase Production Should Not Impact Global Oil Market. Understand the Reasoning and the Geopolitical Context.
The discussion about the future of oil gained a new chapter during the World Economic Forum in Davos, Switzerland.
On Friday (23), Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, was categorical in stating that the current political situation in Venezuela should not generate a “significant impact” on the global commodity market.
The statement cut market anxiety and provoked immediate reactions among analysts and investors.
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While many observers bet that the instability in Venezuela and the United States’ plans to increase Venezuelan production could affect prices and supplies, the Saudi position suggests caution.
According to Al-Jadaan, any substantial increase in Venezuelan production will require time and robust investments, which limits its effect on international oil prices.
The Saudi Perspective on the Impact of the Venezuelan Crisis
In the closing debate in Davos, the Saudi minister attempted to disconnect the political drama in Caracas from the stability of the global oil market.
He emphasized that, although the U.S. has taken control of Venezuelan oil sales after the capture and deposition of Nicolás Maduro on January 3, this should not substantially alter the balance of global supply and demand.
Al-Jadaan pointed out that even if Venezuelan production increases, it will require time and considerable investments in infrastructure and technology. Without these resources, the capacity for extraction, transportation, and refining remains limited.
Venezuela Has Enormous Reserves, but Production Is Declining
From a geological perspective, Venezuela still holds the largest proven crude oil reserves in the world, with about 303.221 billion barrels, surpassing Saudi Arabia and Iran, according to OPEC data.
However, this does not translate into robust production. Decades of corruption, mismanagement, and lack of investment have caused production to plummet from over three million barrels per day to around 1.2 million barrels currently.
Data from the International Energy Agency (IEA) indicates that in 2025, Venezuela averaged 950,000 barrels per day, of which about 780,000 were exported.
Companies Still Hesitate to Return to Venezuela
Although the U.S. administration expresses interest in recovering Venezuelan production, major global oil companies have maintained a cautious stance.
Sanctions, legal uncertainties, and the need for heavy investments in infrastructure lead many players to avoid a swift return to the country.
This scenario connects to the Saudi understanding that there will not be an immediate supply shock in the global market. Even with the U.S.’s stated intention to increase Venezuelan production, logistical and financial realities still limit this potential in the short term.
Global Market and Broader Context of Oil
Saudi Arabia’s position also seems aligned with a broader view of the markets, where isolated political shocks do not always translate into immediate and significant impacts on oil prices—especially when other major producers maintain their supply levels.
Decision makers in the sector believe that for there to be an impact, production would have to be substantially increased and quickly integrated into global supply.
This view reinforces the idea that even in the midst of crises, major oil markets tend to adjust slowly to new production flows rather than react abruptly to political-diplomatic events.
Do you think that political crises like that of Venezuela can indeed affect oil prices worldwide, or is the global supply so large that it won’t change anything, as Saudi Arabia claims?
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