Investing.com’s commodities analysis notes that the immediate driver of oil prices is heightened geopolitical risk linked to Iran. Senior Economist Art Woo of BMO observes that Washington appears to have chosen escalation as a policy option, keeping the market under pressure ahead of the U.S. mid‑term elections. The analysis says this risk premium has lifted crude prices above US$90 per barrel, with buyers paying not only for the barrel but also for the risk of disrupted shipping, insurance or replacement.
The report adds that a separate, longer‑term factor involves a U.S.–Venezuela agreement covering roughly one‑fifth of Venezuela’s oil reserves. While the deal does not set an immediate ceiling on prices, it places a potential future supply source on investors’ radar.
Venezuela’s production history is outlined: the country once produced just over 3 million barrels per day (mb/d) in the mid‑1990s, fell to an average of 530 kb/d in 2020 after sanctions and mismanagement, and has since recovered to about 950 kb/d in 2025 and roughly 1.1 mb/d in July following the removal of President Nicolás Maduro earlier in the year. BMO expects an additional 100‑200 kb/d by year‑end.
Interim President Delcy Rodríguez estimates that developing the 17 fields covered by the agreement could eventually add more than 1.5 mb/d, but the analysis cautions that bringing those barrels online would likely require three to five years. Even if the full increase materialises, BMO calculates it would raise global supply by about 1.5 % against pre‑war production of roughly 107 mb/d, a level the analysts deem unlikely to trigger a structural price collapse.
The analysis highlights a competitive risk for Canadian heavy‑crude producers, as Venezuelan barrels would compete in the same high‑sulphur market segment that many Canadian producers target, particularly for U.S. refineries.
Looking further ahead, the report says the market must also consider potential capacity expansions by non‑OPEC+ producers, faster electric‑vehicle adoption, renewable‑energy investment, larger strategic stockpiles, underinvestment elsewhere, or fresh disruptions. For now, however, the price is being set by the short‑term geopolitical premium from Iran, while Venezuela’s future output remains a longer‑term consideration.
