Maduro Capture Sparks Market Jumps, But Oil Flow Uncertain

The dramatic capture of Venezuelan President Nicolás Maduro by US forces has sent immediate ripples through global financial markets, with some sectors experiencing significant gains despite expert warnings that the move won't instantly change the world's energy landscape. Shares in major US energy companies, including Chevron, ConocoPhillips, and Exxon, saw notable increases as investors speculated on new opportunities to access Venezuela's vast oil reserves. Chevron, the sole US firm currently operating in the country, saw its stock climb by 4%, while Spanish energy giant Repsol also recorded gains. This surge followed the US President's declaration of intent to tap into Venezuela's oil wealth and oversee a transition for the nation. However, industry analysts are quick to pour cold water on the idea of an immediate oil boom. Experts suggest that any significant revival of Venezuela's oil production would require billions of dollars and considerable time to repair infrastructure that has been in decline for years. Lord Browne, former chief executive of BP, highlighted the "tremendous amount of skill, investment, and time" needed, even suggesting that output could initially fall during a reorganisation period. Venezuela's crude production currently accounts for a mere 1% of global output. Beyond oil, the geopolitical upheaval also triggered movements in other market segments. Precious metals like gold and silver, traditionally seen as "safe-haven" assets during times of uncertainty, saw their prices rise. Gold was up almost 2%, with silver climbing over 3%. Simultaneously, defence stocks across Europe surged, with UK giant BAE Systems gaining 5% and Germany's Rheinmetall jumping over 8%. This reflects investor belief that heightened international tensions often lead governments to increase military spending. Despite these specific sector gains, broader global markets largely avoided a widespread sell-off. Investment directors noted that while such geopolitical events typically unnerve investors, Asian markets, for instance, actually saw gains, focusing on other economic news. This suggests a cautious optimism that the fallout from events in Venezuela will remain contained, even as the dramatic developments continue to unfold. --- Managing your business finances? TaxAce provides smart online accountancy services for UK businesses with flexible monthly plans. Image and reporting: https://www.bbc.co.uk | Read original article