How does the rise in oil prices due to the Middle East crisis impact Venezuela?
We explain, with economist Francisco Monaldi, the impact of rising oil prices on the Venezuelan economy in 2026.
TL;DR
- The conflict between the United States and Iran has caused a significant increase in Brent crude oil prices.
- The Strait of Hormuz, through which 20% of global crude oil circulates, is under threat of blockade by Iran.
- Francisco Monaldi, an economist, suggests that higher oil prices could temporarily boost Venezuela's income.
- The long-term impact on Venezuela depends on the duration of the conflict and factors like production capacity destruction or increased insurance costs.
- The US administration, under Donald Trump, controls national oil sales, and the mechanism for delivering these funds to Venezuela is uncertain.
- Higher oil prices and reduced discounts could improve Venezuela's fiscal revenues, potentially stabilizing its microeconomy.
- Instability in the Middle East also threatens global inflation targets, according to ECB chief economist Philip Lane.
- Projections suggest oil prices could reach $100-$120 or even $200 if the conflict escalates significantly.
- Venezuela's oil production in January was 924,000 barrels per day, a decrease from December.
- The US Department of Energy forecasts potential production growth for Venezuela, but revenue transfer remains under US surveillance.