Shares in US energy companies rose sharply as investors assessed whether the US seizure of Venezuelan President Nicolás Maduro could open the door to greater access to the country’s oil reserves, while gains in precious metals and defence stocks reflected heightened geopolitical caution.
Shares in Chevron opened more than 4% higher after jumping over 7% in pre-market trading. Other US oil producers, including ConocoPhillips and Exxon Mobil, also posted gains as trading got underway.
Oil And Energy Stocks React
Chevron is currently the only US energy company operating in Venezuela, a position that drew particular investor attention. Shares in Spain’s Repsol, one of the few other Western firms with operations in the country, rose about 2%.
Oil services companies also advanced, with Halliburton climbing more than 7%.
Oil prices were more mixed. Brent crude rose by more than 1% to around $61.50 a barrel. Analysts said ample global supply meant any disruption linked to Venezuela was likely to be limited, keeping prices well below levels seen in recent years.
US President Donald Trump has said the US intends to tap Venezuela’s oil reserves following Maduro’s capture, adding that Washington would oversee the country until what he described as a safe transition.
Industry analysts have said the move is unlikely to have an immediate effect on energy prices. Experts have also warned that restoring Venezuela’s oil infrastructure, which has deteriorated since the early 2000s, would require billions of dollars in investment.
Venezuela’s crude output has accounted for roughly 1% of global supply in recent years, according to investment strategist Vasu Menon of OCBC.
Lord Browne, former chief executive of BP, told the BBC’s Today programme that reviving Venezuela’s oil sector would require significant skill, capital, and time. He said that while some production might resume quickly, overall output could fall initially as the industry undergoes reorganisation.
Precious Metals And Defence Stocks Gain
Precious metal prices climbed as investors shifted toward assets viewed as safer during periods of uncertainty. Gold rose about 1.9% to $4,412 an ounce, while silver gained 3.6%.
Gold recorded its strongest annual performance last year since 1979, rising more than 60% and reaching a record $4,549.71 on 26 December. Analysts attributed those gains to expectations of interest rate cuts, strong central bank demand, and concerns over global tensions and economic uncertainty.
Defence stocks across Europe also moved higher. In the UK, shares in BAE Systems rose about 5%, while Germany’s Rheinmetall gained more than 8%.
Russ Mould, investment director at AJ Bell, said markets had avoided a broader sell-off despite rising geopolitical tensions. He said defence stocks often attract investor interest during such periods, as expectations grow that governments may increase military spending.
Asia Markets Look Elsewhere
Mining stocks also benefited from higher metal prices, with Endeavour Mining and Fresnillo both rising more than 4%.
Share markets in Asia posted gains, with investors focusing on developments unrelated to Venezuela. Japan’s Nikkei 225 rose 3% on the first trading day of the year after data showed manufacturing activity stabilised in December.
Major indexes in South Korea and China also advanced. Zavier Wong of eToro said the moves reflected confidence that any fallout from events in Venezuela would remain distant for Asian markets.
Featured image credits: Freepik
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