Gold and silver prices surged at the opening on January 5 Beijing time. By around 7:20, spot gold broke above $4,366, rising over 0.8%, while spot silver gained nearly 0.7%. COMEX silver surged more than 2.5%.
Both WTI and Brent crude oil experienced sharp, short-term declines.
On the news front, U.S. President Donald Trump stated on January 3 local time that law enforcement had captured Nicolás Maduro and his wife under high alert, claiming all military forces in Venezuela had been incapacitated and that the U.S. would restore normal oil supplies.
On January 4, Trump issued a threat to Venezuela's acting president, Delcy Rodríguez, warning she would pay a "heavy price" if she did not "do the right thing." Trump also suggested the U.S. might continue foreign interventions, asserting America "absolutely needs Greenland."
Xi Jiarui, a crude oil analyst at JLC, noted that Venezuela is a significant global oil producer and an OPEC member. Following U.S. sanctions, the country has been temporarily excluded from production cut or increase agreements. Recent U.S. actions could force the shutdown of numerous oil wells, leading to a further decline in Venezuela's crude output. This situation may not cause a major shock to the energy market in the short term.
Simultaneously, Xi cautioned that escalating geopolitical tensions could drive up risk premiums. Combined with fears of potential supply disruptions, this might provide upward momentum for oil prices. If U.S.-Venezuela tensions continue to develop, WTI and Brent crude could potentially rise to around $60 and $63 per barrel, respectively.
From a medium to long-term perspective, Xi analyzed that U.S. actions against Venezuela also reflect a desire for the country's abundant oil resources. Once the situation stabilizes, the U.S. might encourage its oil companies to return to Venezuela. With the world's largest proven oil reserves, Venezuela holds immense production potential. If the U.S. gains control, its oil firms could increase crude production there, thereby boosting global oil supply. Consequently, for the oil market, absorbing the impact of U.S.-Venezuela tensions is merely a matter of time.
Venezuela's oil production could ultimately increase, potentially leading to further declines in oil prices. Saul Kavonic, Head of Energy Research at MST Financial, estimated that if Venezuela eventually sees sanctions lifted and attracts back foreign investment, its oil exports could approach 3 million barrels per day in the medium term.