On the one hand, the United States is ready to launch a new phase of operations over Venezuela in the coming days, as an attempt to take control of Venezuelan oil. Even Chevron Corp., the only major American oil company left in the Latin country, has said it wants to remain because it sees a role in reconstruction of your economy when the time is right.
“Venezuela has stopped being a player important in the international oil sector, now what is interesting there is to wait to see what happens after it comes out Nicolás Maduro, as president of Venezuelaof the country, which is what the market expects,” experts in the oil sector tell EL ESPAÑOL-Invertia.
“The country’s potential is enormous due to its oil reserves, but also due to its natural resources in critical raw materials,” they add. It has large reserves of minerals such as iron, gold, bauxite, nickel and diamondsand non-metallic resources such as coal, limestone and coltan.
“Today, they sell their oil mainly to China and India, and their agreements with Russia, but it only produces a third of what it produced ten years ago. The only companies that are there, Respol, the Italian Eni y Chevron, “They are there without being able to sell their product and losing money, but they are waiting for after Maduro.”
Furthermore, the focus is on the peace talks in Ukraineand therefore, markets are weighing the prospects of a possible agreement and a new scenario that could lead to an easing of sanctions on Russian oil.
That said, “an agreement is unlikely to be reached soon,” analysts at ING. At the same time, attention remains focused on new US sanctions against Russian oil companies Rosneft and Lukoilwhich came into force on November 21.
These measures cut off the main routes for Russian crude exports and restrict global buyers and banks from carrying out transactions with these giants.
Interest rates
On the other hand, in this context, “investors have given more weight to the possibilities of a interest rate cut in the United States than to the perspective of a peace agreement in Ukraine,” sources from the oil sector tell EL ESPAÑOL-Invertia.
Global brokerages remain divided over whether the Federal Reserve of the US will cut interest rates in its december meeting after last week’s mixed signals on job growth and unemployment clouded the economic outlook.
Lower interest rates could boost economic growth and oil demand by lowering borrowing costs for consumers and businesses, according to a note from the analysts of the energy advisory firm Ritterbusch and Associates.
Still, geopolitics remains a risk when judging supply levels next year, as Venezuela e Iran produced 2.2 million b/d below their current levels in early 2021, and the Russian supply may not meet expectations.
Forecasts for 2026 and 2027
Looking to the future, JPMorgan predicts that the Brent crude oil will be at $57 per barrel in 2027while it will maintain no changes their estimates for 2026 at 58 dollars.
According to Bank of America (BofA), By 2026, oil demand can grow by one million barrels per day (b/d). It is expected that the supply of non-OPEC+ countries increase by around 0.8 million b/d and OPEC+ is set to continue its fight for market share.
So there could be an imminent surplus of 2 million b/d, which should result in Brent and WTI prices averaging only 60 dollars/bbl y $57/bbl in 2026respectively.
The United States and Ukraine sought on Monday to narrow gaps in a peace plan to end the war between Russia and Ukraine after a U.S. proposal that kyiv and its European allies viewed as a Kremlin wish list.
Russian income drop
And to top it all off, the sanctions imposed by the US on the Russian oil companies Rosneft and Lukoil, which came into effect last Friday, have also had their consequences, according to Onyx Capital.
Russian state oil and gas revenue could fall by around 35% year-on-year to 520 billion rubles ($6.59 billion) in November due to cheaper oil and a stronger ruble, according to Reuters calculations.
To BofA Global Economicsas global GDP expands by 3.3% in 2026, oil demand growth should sustain.
Three factors could cause Brent oil prices to fall to around $50 a barrel if downside risks materialize, BofA added.
In any case, it is not convenient for the OPEC+ that prices will fall considerably due to the increase in financing needs. Additionally, US shale oil production is about to plateau at $60/bbl Brent and could contract significantly if prices fall another $10/bbl.
Finally, there is still a ample storage capacity and China should continue building strategic crude oil inventories through 2026, BofA concluded.