Economic consequences of Maduro’s arrest

Oil price specialists write that “the removal of Maduro has immediately created a power vacuum in Venezuela, leading to massive market volatility in the energy sector as traders weigh the risk of civil war against a potential oil recovery”.

What will happen next in Venezuela?

Venezuela has huge energy resources, the largest oil reserves of the Planet. China and India are main clients. Russia is a strategic energy partner.

Any delivery disruptions will have impact on the global energy markets.

The geopolitical landscape of the Western Hemisphere shifted violently Saturday morning. In a nighttime operation that mirrors the 1989 capture of Manuel Noriega, U.S. special operations forces—reportedly including the Army’s Delta Force—struck Caracas and seized President Maduro and his wife, Cilia Flores.

But the rest of the Maduro regime is still around. Just Vice President Rodriguez is rumored to be in Russia.

Russia has expressed full support of Venezuela – which sounds not convincing as logistics and distance make it very difficult for Russia to handle any support.

But there are no celebrations in the streets of Caracas or in other parts of the country. It seems that the power structures are still in place and operative.

If the US might bring in a new leader, it needs much more than threats to impose a new rule and a new elite. It may need a continuous presence of US troops, either on the fleet in front of Vemezuela’s coast, or even on the ground. Venezuela can be en route to a civil war – and energy markets now are reacting to this risk. Prices will increase, less offer will be on the markets. Europe will feel additional pain and India and China may further ask Russia for energy deliveries. The US may be immune as it since long has not bought oil from Venezuela and has own production to increase in the short run.

Oilprice.com writes: “For the energy markets, the immediate question isn’t necessarily about justice, but about the flow of 800,000 to 900,000 barrels of oil per day. Early assessments from state-run Petróleos de Venezuela S.A. (PDVSA) suggest that production and refining facilities remain intact, though the port of La Guaira has sustained “severe damage.”

Venezuela sits on roughly 300 billion barrels of oil… most of it trapped under a crumbling infrastructure that needs billions in Western capital to breathe again.” But these 300 billion barrel makes Venezuela hugely oil richtig, one important reserve of the World and an energy-geopolitical target for the US.