[ANALYSIS] US struck Venezula and captured President Maduro, what's next?

Quick Recap

• The US launched a large-scale military operation in Venezuela over the weekend.
• US forces struck key military and infrastructure targets around Caracas to enable a special forces raid.
• Venezuelan President Nicolás Maduro and his wife were captured at their residence, extracted by US special forces, and flown to the US. Venezuela’s defence minister said members of Maduro’s security team and civilians were killed during the US operation; casualty numbers remain unclear.
• US President Trump announced the operation, saying the US would run Venezuela temporarily until a “safe and proper” political transition.
• Trump stated US oil companies would move into Venezuela, restore production, and sell oil internationally, with the US to be “reimbursed” for intervention costs.
• US President Trump said they are ready to stage a second strike if necessary and had assumed a second wave was needed, but now probably not. Furthermore, he said the US is not afraid of boots on the ground in Venezuela.

Power Transition and International Reaction

• Venezuela’s Vice President Delcy Rodríguez was granted temporary presidential powers, rejected US authority, and demanded Maduro’s return.
• Trump warned Rodríguez she would “pay a big price” if she ignores US guidance.
• US Secretary of State Rubio said the US is not at war with Venezuela, describing Washington as “running the direction” of a transition rather than governing directly.
• International reaction has been mixed: China, Russia and regional allies condemned the operation, while some Western governments supported Maduro’s removal but urged respect for international law.

REACTION: Markets stayed overall resilient, with equities (ES +0.1%, Euro Stoxx 50 futures +0.7%) and crypto higher, USD firm, rates steady, oil softer on future supply focus, and gold supported by modest geopolitical hedging.

What's Next?

• Nicolás Maduro and his wife are in US custody and are due to appear in federal court in New York on Monday on long-standing drug and weapons charges.
• Opposition figure Edmundo González called on the Venezuelan military to uphold the 2024 election result and support a constitutional transition.
• Analysts and former US officials have warned that the “day after” plan remains unclear, raising risks of prolonged instability despite the removal of Maduro.
• The UN will hold a meeting on the situation on Monday. The likes of the UK have already, according to The Times, intimated that they will abstain if the action is subject to a vote.

Desks' Thoughts

• No near-term supply boost is expected from Venezuela, given infrastructure damage and a prolonged recovery timeline.
• JPMorgan estimates Venezuelan output could rise to ~2.5mbpd over the next decade from around 0.8mbpd currently, but near-term exports remain uncertain amid the political transition and questions over flows to China.
• Goldman Sachs also sees long-term upside to Venezuelan production, which could weigh on global crude prices over time, noting the country’s sharp output decline over the past two decades.

Possible Expansion

• Trump suggested potential US action could extend beyond Venezuela, making hostile remarks about Colombia.
• Trump has signalled the US could broaden its regional focus to Cuba, and is set to brief House Republicans amid mixed political reactions to the Venezuela operation.
• Trump’s actions have heightened concerns about similar US intervention elsewhere, including Greenland, prompting Denmark’s PM to urge the US to stop making takeover threats.