Recent headlines have been full of Nicolas Maduro, Donald Trump, and Delcy Rodriguez as the United States successfully concluded a U.S. Military operation to abduct Maduro from his residence in Caracas in the early morning hours on Saturday, January 3rd, 2026. A press conference by the Trump Administration later that morning made it clear that the President intends to leverage Venezuela’s natural resources, mostly oil, for the benefit of the people of the United States and the Venezuelan people. So, will oil futures prices rise on Monday, January 5th, 2026: Probably, Maybe, or Probably Not?
Wall Street is known for its quick reactions to geopolitical events. The Trump administrations tariff announcements appear to have caused significant stock market price disruptions in 2025, especially in April. Meme stocks like American Eagle and Kohls have been up. Meanwhile, Bitcoin has been up and down in its typical volatile pattern. Meanwhile crude oil futures have been trending towards pre-pandemic (coronavirus or COVID-19) levels:
So, what happens when the President of one of the most powerful economies and militaries in the world announces he has successfully extracted the head of a nearby nation and intends to leverage that nation’s vast oil reserves for the benefit of the people of that nation and of his own country?
Evidence for rising oil company stock prices…
Looney (2003) reports, “A futures contract is an agreement to deliver a specified quantity of a product at a specified future date, at a price (the futures price) to be paid at the time of delivery.” If crude oil futures are at pre-coronavirus pandemic levels of $60 but one suspects they may rise to post-coronavirus pandemic levels of $80, one may purchase futures contracts now to turn a quick 15% profit later. Patterns from the Gulf War, the Taiwan Strait Crisis, Operation Desert Strike, Operation Desert Fox, 1986 Libyan Operations, the Gulf Shipping Crisis, and the 1994 Iraq-Kuwait border confrontation suggest that oil futures-market curves tend to slope upward before a crisis (Looney, 2003).
The above chart shows that crude oil prices have declined by approximately $10 over the past six months. Looney (2003) suggests that increased uncertainty around the availability of oil contribute to a rise in the price of oil futures. So, if oil futures prices increase with supply uncertainty, one would expect serious supply uncertainty in the current U.S.-Venezuela conflict to cause oil futures to rise. But Bloomberg (2026) reports as of January 4th, Chevron and the Trump Administration are confident that oil resources in Venezuela have remained untouched by recent U.S. Military operations in Venezuela.
Julian Lee (Bloomberg, 2026) reports that securing huge profits from Venezuela’s crude oil may be difficult due to limited accessibility and diversity of application compared to other oil supplies. Lee states that 86% of Venezuela’s oil is reported difficult to access and not easily converted to petrochemical feed stocks or plastics (Bloomberg, 2026). Lee also suggests that current buyers (e.g. China) of Venezuelan oil may be the most relevant markets for continued Venezuelan oil sales (Bloomberg, 2026).
Answer: Maybe.
If the conflict in Venezuela expands and uncertainty rises around Venezuelan oil supplies, buyers of Venezuelan oil are likely to look elsewhere which may cause a temporary undersupply of oil and a temporary rise in oil prices. If buyers can rely on oil reserves while securing oil contracts with other suppliers, oil futures may not rise dramatically. Buy the amount of uncertainty and disruption remains to be seen, and one would suspect traders of oil futures to be watching the conflict in Venezuela very closely this week.
Sources:
Bloomberg Television. (2026, January 3). What the US strike on Venezuela means for oil [Video]. YouTube. https://www.youtube.com/watch?v=srdpZY_Pxpc
Looney, R. (2003). Oil Prices and the Iraq War: Market Interpretations of Military Developments; Strategic Insights: v.2, issue 4 (April 2003). Calhoun: The Naval Postgraduate School Institutional Archive (Naval Postgraduate School). http://hdl.handle.net/10945/25431
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