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The Oil Gambit: Venezuela and the Return of Hard Power January 05 2026Market Update

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History does not repeat itself politely. It returns in bursts, often without warning, and almost always with consequences that outlive the headlines. January 3, 2026, will be remembered as one such moment. Operation ‘Absolute Resolve’ did not merely unseat a president in Caracas; it reasserted an old truth of global politics: when energy and power intersect, legality becomes secondary to leverage.

The language has been clinical. “Stabilisation.” “Infrastructure revival.” “Managed extraction.” But stripped of euphemisms, the message is blunt. The United States has decided that Venezuelan oil can no longer remain idle, mismanaged, or worse, aligned against its interests. The intervention was not about democracy alone. It was about barrels.

And there are many barrels at stake.

Venezuela sits atop roughly 303 billion barrels of proven oil reserves, about 17% of the global total. It is a geological irony that a country so energy-rich could become so economically fragile. Years of underinvestment, sanctions, and institutional decay turned what should have been a petrostate powerhouse into a cautionary tale. Production collapsed, refineries rusted, and oil became less an asset than a liability.

Washington’s calculation is simple. Revive Venezuelan production with American capital and technology, flood the global market, and undercut OPEC’s ability to dictate prices. The phrase “energy dominance” has often sounded rhetorical. In Caracas, it has taken physical form.

The collateral impact is geopolitical.

For over a decade, Venezuela served as a strategic foothold for China and Russia in the Western Hemisphere. Beijing secured long-term oil supplies at concessional rates, quietly fuelling its manufacturing engine. Those arrangements now look fragile. A US-managed energy regime is unlikely to honour politically discounted contracts. Oil, once again, will be priced by markets aligned with Washington.

Russia’s loss is more strategic than commercial. Caracas offered Moscow presence, symbolism, and leverage in America’s backyard. Its removal weakens Russia’s global chessboard at a time when Europe and Ukraine continue to stretch its resources.

Amid the moral outrage and legal debates, India is doing what it usually does in moments of geopolitical churn: calculating quietly.

For New Delhi, Venezuela is unfinished business. ONGC Videsh owns 40% of the San Cristobal oil field, an asset that once promised significant scale but has since been reduced to near dormancy. Production fell to a trickle, barely 5,000 barrels per day. Under a stabilised regime with external security and technology, output could realistically rise to 100,000 barrels per day.

There is also money to be recovered. Indian public and private entities are owed over a billion dollars in dividends and payments trapped by sanctions and operational paralysis. A revival of exports creates the possibility, at last, of settlement.

More importantly, India’s refineries are among the few globally capable of processing Venezuela’s heavy crude without extensive modification. This technical compatibility is not glamorous, but it is decisive. In a world reshuffling energy supply chains, India is not merely a buyer; it is a necessary participant.

Yet this is not a story of winners alone.

A US-centric oil order may bring short-term price moderation, but it also reintroduces volatility rooted in power rather than markets. The speed of the Venezuelan intervention should give pause. Energy security achieved through force carries long shadows, especially for countries dependent on stable imports.

For India, the task ahead is balance. To leverage opportunity without entanglement. To benefit from revived supply while resisting overdependence on any single geopolitical patron.

In 2026, the interpretation gap has narrowed. We are no longer guessing what energy power looks like in practice. Venezuela has answered that question for us. What remains uncertain is whether this new order will deliver stability, or merely postpone the next reckoning.

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