Oil markets and investors hold steady in the face of massive geopolitical uncertainty

Markets 2026-01-04 18:31

Analysts and economists covering politics, oil, crypto, and risk say the Trump-Venezuela situation is not expected to hit the global economy or financial markets in any serious way when the trading floor opens Sunday night.

Yes the Venezuela invasion indeed is a very big deal, because Washington hasn’t carried out this kind of direct action in Latin America since the 1989 invasion of Panama that removed military leader Manuel Noriega under similar claims.

And Cryptopolitan reported earlier that Trump told reporters at a press conference after the fact that the United States would run Venezuela with a group, adding Secretary of State Marco Rubio would work on the details.

Around the same time, Trump warned that the U.S. could step in to support protesters in Iran if security forces opened fire, as unrest there left several dead and created the most serious internal challenge for Iranian authorities in years.

Oil markets and investors hold steady in the face of massive geopolitical uncertainty

Attention in markets has of course stayed on energy, not stocks or crypto. The OPEC+, which includes Venezuela and Russia among others, is gonna meet in a few hours to discuss output levels.

Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia, said the reaction across markets is limited. “The overall market reaction will be muted. We might get some market moving news tomorrow during the OPEC meeting,” Jamie said.

He added that shares of large oil companies and drillers could attract interest if talk grows around rebuilding the oil industry in Venezuela.

Helima Croft, head of global commodity strategy and MENA research at RBC Capital Markets in New York, said the scale of any rebuild would be large.

“This an enormous undertaking, given the decades-long decline of the oil sector, also the U.S. regime change and nation-building track record is not one of unambiguous success,” Helima said.

Brian Jacobsen, chief economic strategist at Annex Wealth Management in Brookfield, Wisconsin, said the situation was expected.

Brian added that from an investor’s POV, large oil reserves could become available over time. He also said the move sends a signal to leadership in Iran and possibly Russia about Trump’s willingness to act.

“Markets sometimes swing into risk-off mode on expectations of conflict, but once the conflict starts, they rotate quickly to risk-on,” Brian said, adding that oil could be the only market to react, especially with forecasts already pointing to a supply glut.

Venezuela is also dealing with a long-standing oil decline and legal disputes

Economists say geopolitical pressure is already part of daily trading. Marchel Alexandrovich, an economist at Saltmarsh Economics in London, said current events add to existing strain.

“From the unresolved trade tensions around U.S. tariffs, to Ukraine, Iran, Taiwan and, now, Venezuela, it is clear that the markets are having to cope with significantly more headline risk,” Marchel said.

Tina Fordham, founder and geopolitical strategist at Fordham Global Foresight in London, said optimism often appears early. “I feel that there’s a lot of optimism about a post-Maduro, post-Chavez Venezuela. I think reality is likely to be messier,” Tina said.

She added that the Monday market open could fuel risk appetite tied to possible change in Iran. “We’ve periodically seen these protests. This time, it’s gaining momentum,” Tina said, pointing out that both Iran and Venezuela are energy producers and consumer markets that have remained closed to global investors.

The country holds some of the world’s largest estimated oil reserves, yet output has collapsed over decades due to mismanagement and lost foreign investment after oil nationalization in the 2000s, including assets tied to Exxon Mobil and ConocoPhillips.

Chevron remains the only U.S. major operating in Venezuela. ConocoPhillips has sought billions of dollars tied to three seized projects from nearly twenty years ago, while Exxon pursued lengthy arbitration after exiting.

In recent weeks, oil tankers chartered by Chevron were among the few leaving Venezuela, after Trump’s December blockade announcement that Cryptopolitan reported.

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