Item 1 of 2 A protester places a banner that reads “Trump, oil is your drug” as people gather outside the U.S. embassy following a U.S. strike on Venezuela where President Nicolas Maduro and his wife, Cilia Flores, were captured, in Buenos Aires, Argentina, January 3, 2026. REUTERS/Pedro Lazaro Fernandez
President Donald Trump said the U.S. would take control of the , while Maduro, whom the U.S. has repeatedly accused of running a “narco-state” and rigging elections, was in a New York detention centre on Sunday awaiting charges. Washington has not made such a direct intervention in Latin America since the invasion of Panama in 1989.
Sign up here.
“The events are a reminder that geopolitical tensions continue to dominate the headlines and drive the markets,” said Marchel Alexandrovich, an economist at Saltmarsh Economics. “It is clear that the markets are having to cope with significantly more headline risk than they are accustomed to under the previous U.S. administrations.”
MARKETS OFF TO STRONG 2026 START
U.S. and global stocks ended 2025 near record highs, having notched double-digit gains in a tumultuous year dominated by tariff wars, central bank policy and simmering geopolitical tensions.
Mohamed El-Erian, a former chief executive of bond fund giant PIMCO, said in a post on X that the economic and financial reaction to Maduro’s toppling was unclear.
“We would have probably seen an immediate decoupling of oil prices (lower on the prospect of increased Venezuelan exports, depending on the leadership succession there) from gold (higher due to safe haven flows amid heightened uncertainty,” had markets been open, he wrote.
Gold rose the most in 46 years to record highs last year, driven by a cocktail of factors including U.S. rate cuts and geopolitical flashpoints.
Trump said at a press conference on Saturday that the United States would “run the country until such time as we can do a safe, proper and judicious transition.” He provided little detail on how this would work, but said he was not afraid of sending in the U.S. military.
NO QUICK FIX FOR VENEZUELA’S OIL
The oil price edged above $62 a barrel in December, when the U.S. blocked sanctioned tankers from entering or leaving Venezuela, but has been fairly stable at around $60-$61 since.
“From an investing perspective, this could unlock massive quantities of oil reserves over time,” Brian Jacobsen, chief economic strategist at Annex Wealth Management, said. “Markets sometimes swing into risk-off mode on expectations of conflict, but once the conflict starts, they rotate quickly to risk-on.”
David Kotok, co-founder of Cumberland Advisors based in Sarasota, Florida, said that the possible unlocking of reserves – if it causes a lower oil price over the long term – could have bullish implications for stocks.
“Whether it happens over the next year or two, and if the market discounts it before it happens, is a separate question,” said Kotok.
Any companies that might want to invest there would need to deal with security concerns, dilapidated infrastructure, questions about the legality of the U.S. operation to snatch Maduro and the potential for long-term political instability, analysts told Reuters.
‘POLITICAL STABILITY AND CONSIDERABLE INVESTMENT’
He said it will also likely add to the uncertainty of the dollar’s role as a safe haven “while raising further questions about deterioration of international institutional pillars.”
Over the longer run, a more stable, productive and prosperous Venezuela could offer the world significant supplies of oil, he said.
“That would be significant for global growth, but it will take political stability and considerable investment to unlock that potential.”
Additional reporting by Davide Barbuscia and Megan Davies in New York, Gregor Hunter Stuart in Singapore; Writing by Megan Davies; Editing by Elisa Martinuzzi, Christina Fincher and Hugh Lawson
Our Standards: The Thomson Reuters Trust Principles.
